What a Week
This was quite a week. 12,000 pierced. A close above 12,000. It even managed to end the week above 12,000 (by 77/100ths of a point. Blowout earnings from GOOG. And a tidal wave of earnings reports, few of them shockingly bad.
If there's an opposite of fear and panic, we have it right now. The VIX pushed even below the trendline I drew for it a while back. These are epic low levels of complacency in the market.
Someone asked yesterday in the comments section about where I place stops. It depends on the chart. There's no set percentage or anything. That would be arbitrary. Take LLL, for instance, which I own puts on right now. I have an order to sell the puts at the market price if the underlying stock goes above 80. It's not based on a formula. It's based on the chart, and every chart is different.
I'm still 99% short right now (with a fair bit of cash on the sidelines), but here's a couple of long ideas for you. There's Redback Networks (RBAK):
As well as Sears (SHLD), which I've bashed for the longest time, but I cannot help but admire its gorgeous pattern. This has got to be the most perfect cup-with-handle pattern I've ever seen. It's beyond me why everyone on the planet would suddenly start buying their leisure suits and knit pants at Sears, but the chart doesn't lie.
I haven't indiscretely shown my positions in a while, so they are below (those that will fit on the screen, anyway; I ran out of room). As always, click on the picture (and any picture on this blog) to see a bigger version.
This market is in a "watched pot never boils" situation, and it's tiresome, I know. Some think we'll have to wait until after the elections are over. Some think we'll have to wait until January. And plenty of people think there's no such thing as a bear market anymore. Time will tell.
12 comments:
I'm guessing that the November 7 elections are going to provide the culmination of the July rally. Just a hunch, but assuming the Dems take control of at least one chamber, a general malaise will set in
first expiration week in months the market hasnt made a big move one way or the other. unfortunately for me i thought it was going to have a good correction down week, only to see my QQQQ 41 puts expire worthless :(
As always, lots of interesting stuff out there:
1) SPX/VIX ratio at extreme high
2) Almost 80 percent of stocks above their 40 day average
3) XAU/30 year bond ratio low (weekly)
The 10 day average of NYSE breadth (A-D) has been positive for months (unheard of).
Haven't seen Bernanke much lately...he's too busy printing money.
Tell me when the trend changes buddy. I'm 100% long as of last week. I think the rally is just beginning. My friends and I just reentered the market (was 100%cash) for the first time since 2002 and are confident this market is ready to take off. We have our party hats out already. I expect at least 20% on the SPY by the end of the quarter. Take care all.
You tell me how you are expecting those gains.....when growth is slowing....???? Recession/slowdown is forthcoming???
I hope everyone of the bulls are leveraged.....right now. The move up so far was irrational...yes it happened and no bull can explain why it happened. Too many were leaning short...now I sense that too many are leaning long...and the market is complacent.
I encourage everyone to to get long and bullish especially after a 12-15% move straight up....hahah but don't say that you weren't warned or there were no signals....cause the inverted yield curve means its different this time.
Get this all - Bush will include specific mention of the Dow being at an all time high in his speech on Weds. Who says this isnt politically motivated? And no Andrew755, youve got it wrong, this rally is good for another 100 to 200 points before it stalls for at least the short term (6 months). Just make sure you dump then, otherwise its a long wait to see a return on your money
The trend will continue upward unless it reverses. Tim and others have been prediciting a bear market for a very long time now. There is no point in anticipating a reversal. Ride it when it actually turns.
Andrew755 - ohh er, perhaps you may be rught after all, I see the Dow is up 75. Crazy>
Downosedive- hahaa..... and that is the reason I'm being patient and am pretty much on the sidelines. I tried to make a purchase this morning but had all of about 5 minutes..... before whoosh...straight up we go!!!
I was completely stupid for not being at the end of July....but way to risky up here- I don't see DOW 13000 on the horizon in the next two weeks...but based on todays action...apparently some do:)
Complacency is the word of the day......
Look at SLAB..... It traded down to 29.30 after its earnings sucked... came up light and now it is up 5%- despite an analyst downgrading it. I'm really pissed off that I missed FCX for a trade today..... I was getting ready to buy but then all of the sudden the market rallied 100 points....
This is why I can't trade quite yet.... I don't care if we go up or down or sideways but either you jump on the roller coaster or stand aside and watch. I want to but into a market that prices in things rationally....
I haven't seen market in the kind of uptrend we're in...in a very long time
October rally is great...but beyond alot of people expectation
cheap energy, strong earnings, quite geopolitics...some factors
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