DEADShort term sentimentsDEAD

[vin]

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]

WSJ notes that there is a mountain of leveraged loans outstanding. The table shows almost $500 bln up from $100 bln in 1999.
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

One doesn't follow the other even though it has.

We get so "oversold" so fast because the market has never been so indexed to itself, compounded by compound leverage deep and wide. There's alot more room than you think in that bottom 10% of your oscillator.

The big leveraged hedgefund shorts like OSTK et. al. might be an interesting long here...if you HAVE to go long.
_________________
Today is the Tomorrow you worried about Yesterday!

[dash]

Hi Lion Hunter,

[lion hunter]

Thanks Dash.
I can see the correlation. However, readings below 20 normally present after a sizeable correction. The spx is still at very elevated levels and yet we have a reading sub 20. Is this not a cause for concern?
I use $NYHL. How does this differ from $RHNYA ?
Im somewhat troubled by the negative reading on $NYHL that last 2 days.

[dash]

[lion hunter]

Market internals look terminal to me.
Reading on NYHL is mega bearish. Couldnt even climb into positive territory after Fridays dead cat rally. TRIN flashing sell signals as well.
13500 on Monday morning and I put my really short shorts on.

[rffrydr]

The ChartOth'day got's something for us Diesel:

http://www.chartoftheday.com/20070608.htm?T

Any street-level reaction to NZ bump? You are now known as the "Butterfly Effect."

I've gone 180 on commodity currencies a couple weeks back when China selloff got NO reaction. The operating idea of China lowering[i] increase[i]
in treasury purchases (as flipside and natural consequence of decision at perfect Trillion to no longer build treasure hoard). In this case higher rates will only attract at a lag. Also off-the-cuff remark by Japanese official that Yen is now only (read, where it should be) where it was just before the Plaza Accord.

I still think there are prospects for much tigher policy than discounted and that high rates will be detrimental to commodities. On the other side the Fed will cut steeper, later than expected. Will consider selling Aussie calls on spike...but those are surprisingly illiquid. Somebody's worried or they wouldn't be taking endruns through Russian media on US Steel

Peso was one good indicator of turn today. The mantra has been that 5.25% back June didn't bother the market is being taken and run with: "is that all you got." I think we've got something more.
_________________
Today is the Tomorrow you worried about Yesterday!

[diesel]

Im still in the bear bunker and my conviction is stronger than ever. I think we are going to see our 10% correction this summer. Rffrydr said it for me, this volatility is a good indication of a top. That said I expect this to be a grinding decline making it difficult to trade. Nuetral may be a good place to be IMO, and other than a few puts and currency plays thats where Im putting my money.

[nodoodahs]

Models still all bullish. I would have liked that other dollar on the SPY limit, though. Would be in the money and not near it on that trade.
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[krips]

I call next week to be an up week. Friday is Options Expiration.

[nonzero]

Consensus seems to point to a 5% correction, we are half way there. But that's just too obvious, consensus seldom works out. Most likely we're gonna see either more than 5% correction or reversal right from here. Nobody knows for sure. All depends on how market forces play out in the next couple of days.

[dash]

[rffrydr]

They call it a bear, Goodfella. 'cause we hibernate. Good to hear from you. Our time is short, my Goodman, we try to make the most of it. The forward march of humanity, or (at least evermore humans) stand against us.

I'm not crying...saved my commitment for the top. To the hour, my brothers--as with last Feb. (the All-Seeing eye sees all ) Sunday night after that monster comeback by the Shanghai the DAX started to fail--beholden to nothing not even a metaphor of a market. --Right in there on your coat-tails, Diesel.

Russell spread still leaves ~50K naked and one or two relative points on the futures adds up. And the fatal emini is profitable! Had that sick feeling in my stomach last week watching the e-mini losses run away (best way to feel a trade is be in it, early and small) and being outright wrong (but not naked) on the US Steel takeover. They may have to run those numbers again, now. Not quite like lookin' at Chinese takeover of BHP...can't get any closer to the precipice there, hey G.F.?

Shanghai up again tonight so don't want to let those words too far out of my mouth. But Banks never made it past Feb; the Regionals nevergot off the March mat. They can make money now just stuffing it away in treasuries. No doubt the Bull has been where it's at and it's momentum still lingers. May have to do some fancy footwork but this one goes to the bears. We don't get many. But they're all good
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Sorry guys, I was waiting for the reclusive 70+ reading on the Barnes and a 13,800 reading on the DJIA.

The NYSE ARMS closed at 1.57 today - definitely not oversold enough and is suggesting that there should be more downside to go over the next few weeks.

[dash]

McClellan Osc and Summation Index testing March lows:

http://stockcharts.com/charts/indices/McSumNYSE.html