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.

chestnutstime · Senior Poster Joined: 24 Oct 2007 Posts: 82

Bill Gross on today's rate cut

http://link.brightcove.com/services/link/bcpid86195573/bclid86272812/bctid1463243851

“The overwhelming problem at the present is deflation not inflation. The Fed should be willing to risk inflation down the road to prevent deflation in intermediate term."

Chestnuts

rffrydr · Posted: Tue Mar 18, 2008 12:57 pm Post subject:

I did want very badly to buy Annaly last week after he bailed after a long hard out fight for his "children and ophans" fund. I just had too much in my own orphan.
_________________
Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Tue Mar 18, 2008 12:47 pm Post subject:

Well I guess I have to step up for Madman. His much ballyhoo'd call on Bear was okay....he said you can trade with them and your accounts with them would be fine. He was talking in the context of the great HedgeFund bail....which was "the Bank Run" in classic form. And he was right: we were there. The domino effect....the "vicious circle."

But the circle was broken. And it broke on the one dealer who could go down. He's missed that. $2 of course was not the "end price," the "market price." It was closer to the $80 the accountants had all along judging by the 100/share value added to JPM yesterday.

Markets are rarely, "always right."
_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Tue Mar 18, 2008 11:37 am Post subject:

With regards to a mention of Jim Cramer in an earlier posting, here is his latest take on the broker/dealer sector as a whole:

http://www.cnbc.com/id/23681280/?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

This is the ultimate contrarian indicator, IMHO.

rffrydr · Posted: Tue Mar 18, 2008 9:53 am Post subject:

Tears of joy spill forth, vowing to God never to do THAT again....anyone want to short Maylasia or Brazil with me? Laughing

_________________
Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Tue Mar 18, 2008 8:39 am Post subject:

Equity put/call ratio still running high this morning. Last reading at 9:30 CST came in at 0.87.

rffrydr · Posted: Tue Mar 18, 2008 7:53 am Post subject:

This huge put imbalance faces friday's expiration. Massed at, yes, 1350. That's without shortcovering. Should be interesting.
_________________
Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 1872

Odysseus · Posted: Tue Mar 18, 2008 6:51 am Post subject:

Agree. The entrails point to fair weather. Could it be that after 4 years of a cyclical bull in a secular bear, we attempt new highs?

True bear markets are tricky. Technical levels need to be adjusted for the reality of the situation.

Enjoy the trade. It should be fun.
_________________
Psychic with Alzheimers. I can predict what I will forget.

HenryTo · Posted: Mon Mar 17, 2008 11:47 pm Post subject:

Thanks for posting it. That's a good interview.

Says that the opportunity is now in the US and not in EM - and that we're close to reaching a bottom but just don't know when.

chestnutstime · Senior Poster Joined: 24 Oct 2007 Posts: 82

Byron Wien's take

mms://media2.bloomberg.com/cache/vfKf0Uusv2Yg.asf

Chestnuts

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

I don't doubt a "snap back rally" will happen...not sure how far it goes and that is the question...talk is about getting back to oversold levels and i wonder how that can happen. We've rallied several times and never broke over the 1395 level...i have doubts and a bit nervous about it.
_________________
LMR

mtvk · Veteran Poster Joined: 12 Jun 2007 Posts: 241

I agree with diesel. spx would test 1387 - 1420 level, before taking on
another dive. I went from stock:bond 50:50 to 100:0 on Jan 23rd. Will go back to 50:50 when spx reaches 1387.

Good reading on risk return:
http://www.ifa.com/12steps/

Dilbert's 9 point financial plan:
http://www.marketwatch.com/news/story/dilberts-9-point-financial-plan-worthy/story.aspx?guid=%7BBE57F0AA%2D03D9%2D4320%2DBC4D%2D83363B6372F6%7D

diesel · Posted: Mon Mar 17, 2008 5:46 pm Post subject:

I personally dont see what all the fuss is about at the moment. There are positive divergences in the major indexes in momentum and breadth. Markets are incredibly oversold and sentiment is signalling a turn. There is plenty of money sitting on the sidelines and all all my individual positions that were bought back around the MT long signals are currently in the Green with the exception of ANF. Shocked

If I add in the profits off last years short position for a annualized review of performance I am very happy!

Disclaimer: If the market tanks 30% here I reserve the right to retract the above comment!

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

Henry...
Couple questions.
First, would you admit that alot more professionals and retail investors are using the internet for charting...www.stockcharts.com and others make it easy.
How do we know that we will ever get back to the highs again as there is so much technical resistance along the way and so many will be using those areas to exit and short? Most i hear will use the 200 day moving average, much like the 2000-2003 time frame, where the market would test and fail.

Second, with a company like bear stearns going out at such a ridiculous price, how can we trust the book values on all the other financial companies? Thus without the financials how can we have a sustained and lasting rally in the stock market if this is the case.

Third, somewhat back to the first, so many very good technicians are in the camp we are in a bear market and will not have a bull market again until the lows are taken out, we get true capituation to the fullest extent with high volume, etc. We did not really get this today, we did back in the summer but have yet had a true capitulation day...unless you count January 22nd, but is that a true bottom.

I wonder why you went from the short position you had already established? Why be bullish on this market, it seems the worst has yet to come.

Most are looking for the next shoe to drop. You seem very smart and well versed but i'm scared out of my mind here. I manage money for others and am scared.
_________________
LMR