Friday, November 10, 2006

Ibid

I rarely do this, but honestly, I have nothing to add. Today the market might as well have been closed. Nothing new to report, no new charts to show, no change of opinion. Just look at yesterday's post.......it's chock full of charts!

In lieu of that, enjoy a blast from the 70s.......it's Jean Jean the Dancing Machine!

12 comments:

h. lovil said...

Ok Tim- two blogs ago you threw in the bear towel...then yesterday you trumpeted the bear's return.

Now you are not sure.

It is just that type of market.

Let us watch the qqqq for a proper break of the highs (they are still flirting) or a break-down.

Even if the Q"s drop, care is needed as it may just be the handle of a cup and handle!

acceltrader said...

LOL This guy dancing in in one place...just like this market.

PB said...

yeah, just imagine if you had bought the DOW back then ... you'd be dancing too right now!

Volvosan said...

It continues to be said that this market is illogical, but at this point it is really getting absurd. Take, for example, the VXN breaking its lower trendline with a 6.8% drop on Friday - somebody out there is obviously loading up on calls. Since many professionals were not working on Friday, that leads to the conclusion that, once again, stupid retail investors are the cause. Does this really seem to you a good time to be taking on new long positions on the Nasdaq, considering how overbought it is? What do you really think the folks over at Goldman are right now - buyers or sellers?
I am with Tim in thinking that if the Nasdaq continues heading higher from here, pushing into the clear where there is no overhead resistance, then it may be several months before it is ready to roll over. Having said that, I was just looking at the upper trendline for weekly closes on the NASDAQ over the last 3 years. We clearly touched it and retreated just a bit this past week. Another sector to watch is anything related to commodities, materials & mining as the CRB is looking very bearish - check out PD, AU, PAAS, RTP, RTI(which has been PARABOLIC lately).
I'm telling you - I can almost taste it. Some of these bulls are going to have their heads handed to them soon!
When that last stupid retail investor has bought that last stock they heard being mentioned on CNBC, it will be time for the bears to pounce! Seems to me that the risk of opening new long positions is extremely high at this time. I, for one, have mostly cashed in my longs - AAPL, GOOG, CSCO, RIMM, LVS, AIG, GG. Better to sit mostly in cash for a while, being more selective about longs, and starting to zero in on shorting what has been weak in this strong market, as well as what has run up parabolic.

PB said...

volvosan, call buying might indicate that there are a lot of shorts out there that are protecting their positions against any further upside. I definitely think that we are in the 9th inning in this market. The only thing pissing me off is that we have not had ANY significant pull-back. It just keeps ratcheting higher while the evidence of a slowdown/recession is mounting. Seems very idiotic, people are again chasing the junk. Yes, we might have a few more months of this BS, but '07 shd be carnage time!

downosedive said...

volvosan and pb - yes both very valid comments. Unfortunately as each day goes by and the DJA holds well above 12000, the confidence to buy continues to grow in the belief that only new highs will be the test and not past lows. illogical, yes and based on human greed etc. however we do need to bear in mind the lack of a real return on the DJA compared with its previous high spell 5 years ago. In order to have provide a real return since then based on the previous high of 11700ish, today it would need to be nearer to 15000. So looking at the DJA purely as an investment engine that over time always has an inflation beating rate of return, at todays level it is way under performing and has much potential to go higher. Its only when we introduce economic and political reality, that we say the current level is far far too high. But at present those buyers are only looking at the DJA as an INVESTMENT ENGINE WITH A RATE OF RETURN THAT HAS A POTENTAIL TO GO MUCH HIGHER IN ORDER TO MERELY PERFORM IN LINE, NEVER MIND ABOUT OUT PERFORMING.

Denver_Investor said...

Gotta tell ya..this is really getting me down. Never a down day that is followed through on.

Since this market intreprets every news item as a positive I'm truly afraid of what this week's economic reports will do to the market. I think there is a good chance we'll be seeing an upside explosion in price over the next few days. I'm closing out the few puts I have on market indexes today. (which should guarantee a plunge for sure...lol)

Even the home builders are acting incredibly strong here...on just disasterous news from the sector. Go figure.

arrgh

trader said...

Very well said Downosedive.Once again, they gave bears a false sense of hope last week when in fact it was a classic bear trap with plenty of rope for a good hangin' today.The NASDQ will now definetly want to get to the 2500 level minimum by years end.And even that is only half way back.This kind of subtle and deceptivly surrepticious rally will put a lot of traders out of business with frustation and losses.So Downosedive ,if you see us going to 15000 over the next couple of years,I'm curious as to how you might play that scenario ?

Andrew755 said...

This rally today is failing ........ it is fading. I'm interested to see what happens this afternoon- this isn't the same overbearing rally we are used to......

chronictown said...

gonna grab some more gold eagles on the pull back. Miners are cheap,jump on lets ride. Whats a girl ta do?

downosedive said...

TRADER
OK, the point I was making was not a prediction on the DJA, but was a comment on how something can be measured in a completely different way by people. We see the DJA and the other indices as way overpriced, because we are linking their performance to the economy now, and in our opinion it just doesnt stack up. We want a fall to bring the indices down to a level we can relate to. On the other hand, the bulls see this current level as something they can relate to and any falls make it cheap and worth buying in their opinions. Now, if their sense of worth is comparing today with the last peak in 2001 they are seeing that it hasnt kept pace to a sustainable average. Traced back to its beginningsthe DJA has over the long termed proved one of the best forms of investment. But during the recent past its fallen behind its rate of return and would need to be nearer to 15000 to get back on track, if you take the last 5 years as being an acceptable period of measure for that analysis. So all i was suggesting is that based on this view of a valuation the DJA is good value and worth buying in a bulls eye. Heck Im a bear, but we must all try and get to know the enemy!!

trader said...

Downosedive,

Thanks for getting back to me, or to all of us really.I'm pretty much in agreement with you on your 'assesment' of the situation right now.I guess after taking 5+ years to get back to the 11750 area,the market is not going to be 'scared of heights'at 12150 anytime soon.The NASDQ also now is a tail wagging the dog situation. Every 'potential' down day reverses when the NSDQ pulls back up . And it looks to me like it wants to close out the year quite a bit higher.I was just wondering if you were going to buy long term leaps and walk-a-way for a year or so or something.I was a die-hard BEAR too when I started reading this 6 months & 1400 pts ago. Now ,I just want to be 'RIGHT' and get a big piece of the next 1400 pts, whether that is Up or DOWN.Anyway, appreciate your opinion and comments. By the way,one of the biggest Bull Blogs out there,that has called a lot of this rally,does see us going back to 10600 near the end of the year. and that
'SOUNDS' good to me too.So we shall see !