DEADShort term sentimentsDEAD

vin · Posted: Thu Jul 06, 2006 8:35 pm Post subject: DEADShort term sentimentsDEAD

New here – mostly swing trading. I’ve been searching for a serious site and believe I have found it here. Mr. To’s commentaries are excellent. Let’s cut to it - I for one am spooked short term (1-3 weeks). Here are my reasons:
First, the current rally just doesn’t seem to have teeth. The move up on June 29 seemed exaggerated. It was just a big ‘Hurrah, the Fed did what we expected.’ Many read a future pause into Bernanke’s statement but who knows? It’s almost as if the market ‘willed’ a rally.
Second, after this delayed follow through day the major indexes responded with a pullback on increased volume (modest in percentage loss).
Third, two days prior (June 27th) all three indices had what I call a ‘heave day.’ They climbed over the previous day’s high only to close lower than the previous day’s low – all on increased volume.
Fourth, there was no doubt some end of the quarter window dressing and short covering.
What has happened since? Some call it consolidation; I call it distribution and selling into bounces. The accumulation volume has been anemic. Although the holiday week clouds things the leading events remain.
Lastly, the most important thing is the gut. Something makes me feel very uneasy (see below). Maybe it was the synthesis of what I mentioned above; maybe I am worried about locking in gains on this recent move up. Nevertheless, I liquidated everything except LEN as I don’t think homebuilders can get beat up much more (gee, wonder where I got that idea?).
North Korea lobbing missiles into the sea doesn’t help. I think there will be one more shakeout before we test old highs again. I don’t know if we’ll sink to (or below) the mid-June lows, but it could be painful. Predictions are pretty much worthless until events transpire. I’m only building an arguable case. The market doesn’t care or need reasons to steamroll every naysayer out there. Let the tape decide.

Side note: I was reading my Bible before the market opened and came across these verses:

“With her enticing speech she caused him to yield, with her flattering lips she seduced him. Immediately he went after her, as an ox goes to the slaughter, or as a fool to the correction of the stocks…” Proverbs 7:21-22

I don’t claim to have divine intervention on my side, and starting my day with this verse might have been what spooked me. Take it for what it’s worth, but the wording in this verse is uncanny in its application to bulls running up a blind (r)alley. The Bible remains the best book on investing ever written (not to mention the invaluable spiritual content). If you don’t have one, get one.

rffrydr · Posted: Thu Mar 27, 2008 10:46 pm Post subject:

Bonds, Ags, buck showing the right direction today and the early optimism is burned.

3-1 puts vs calls on LEH.
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rffrydr · Posted: Wed Mar 26, 2008 2:48 pm Post subject:

xxx Arms maintaining bulishness and ready to short Resources a la Alcoa:

http://images.thestreet.com/tsc/common/images/storyimages/032508_arms01.gif
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Today is the Tomorrow you worried about Yesterday!

lmrhoades · Senior Poster Joined: 17 Jan 2008 Posts: 100

i don't think your post worked rrfdr
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rffrydr · Posted: Mon Mar 24, 2008 2:44 pm Post subject:

This guy is not on the same team: doesn' t like the volume in the SPY but mainly the Russell: I'm expecting this in Russell.

oops

http://images.thestreet.com/tsc/common/images/storyimages/spy0324.gif
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Odysseus · Posted: Sat Mar 22, 2008 1:43 pm Post subject:

Don't disagree. The Fed was successful implementing 'operation twist' and I would not be surprised if a little back room currency intervention was undertaken. Raising or threatening to raise margin requirements on commodities took pressure off so a 75bp reduction was/is not viewed as inflationary. Fat chance.

We seem to be consolidating at lower levels but at least stable with a potential positive market outcome. The next shoe to drop.

The ECB, having fulfilled their anti-inflationary mandate will no doubt believe they can start lowering rates. It's called competitive devaluation or begger thy neighbor. Seen this movie before. Good luck on the trade and for what it's worth, I'll join.

Promise me we aren't overplaying this hand! I see the boys at ECRI or whatever that alphabet is finally wiped the fog off their rear view mirror.
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rffrydr · Posted: Sat Mar 22, 2008 12:15 pm Post subject:

Kudo's to Bernanke and "the boys." Friday could have easily been "it." What I really like about this turn (remains to be seen) is something you don't find in the TA books but there all the same--as part of the concept "double-tops/bottoms" etc.

After a career of playing the hero and calling turning points it always amazes me how a "second chance" comes along--often at a better price. Soros always liked to trade against the turn he was going to trade. The 290 down day smacked of this. The collapse of BSC forced roll trades on many of these commodities (Hedge F. concentrated in Bear) as Fed was pushing margin requirements "openly behind the scenes" at the same time. Nice orchestrated selloff to provide a second entry point after market got away from itself on Tues. Good buying into a long weekend where london rumour-mongering nailed us last week. Barring any more of that next week could prove very capable indeed.
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Today is the Tomorrow you worried about Yesterday!

gregf · Posted: Fri Mar 21, 2008 9:31 am Post subject:

Hearty Kudo to Henry!

IBD noted that the market followed through yesterday!

rffrydr · Posted: Thu Mar 20, 2008 11:06 pm Post subject:

Big volume in XLF this last 10days that's the heart of the matter.

Used to be if you got 250pts you were on your way somewhere; 450pts and you were good for the season. Time to get small. Let us live in interesting times.
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Today is the Tomorrow you worried about Yesterday!

probtrader · Senior Poster Joined: 22 Oct 2005 Posts: 130

rffrydr · Posted: Thu Mar 20, 2008 1:10 pm Post subject:

Volitility marks turning points. The near dismantling of the market's backbone...THE dismantling of the great bull market in Yield, marks turning points in volitility. We've lost the floor. We've lost the quant funds. We've lost retail long ago. And we still have the alogrithyms.

And we're still way up high.

They sure were able to buy plenty of fear yesterday. For now I'm trying to take advantage of it with option premia. If I'm graced with a big move I'll sell OTM calls and ATM puts against it and either double up; or, have them call it a day, and walk away happy.

LTCM is missed. On the flipside: many of these "private exchanges" are probably suffering and we could see more institutional money coming back in.

I'm liking that word "mini" more and more.
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nodoodahs · Moderator Joined: 06 May 2005 Posts: 1872

I'm on board with the Jan lows representing a pretty firm bottom, but I'm finding it hard to believe that the action of the last couple of days is indicative of anything like the trends we'll emerging see when the market stabilizes. This action looks (to me) as if the sector/asset map is distorted by short covering and profit-taking on longs.

Thoughts?
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gregf · Posted: Thu Mar 20, 2008 9:04 am Post subject:

volume on SPY is off so far

rffrydr · Posted: Thu Mar 20, 2008 5:53 am Post subject:

It's an unholy combination: thin markets, electronic trading, "high" prices and beached whales.
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Today is the Tomorrow you worried about Yesterday!

probtrader · Senior Poster Joined: 22 Oct 2005 Posts: 130

joe0528 · Junior Poster Joined: 22 May 2007 Posts: 24