Justa's Dive Bar

[Jerry Olson]

C:

are you watching this nut case market from afar???

[Jerry Olson]

C;

My summer rally is moving along nicely<g>

[Jerry Olson]

actually the markets during earnings season is a little better for me since there's more volume each day

other then that it's been boring me to tears<g>

[chainik]

I agree with "mild retest of lows, 800-850, maybe 700-750", but cannot comment on the rest. Certainly makes sense, but I also buy inflation arguments :)

[Lone Ranger]

c,
"What do you think? " i think our recession is worse than most think, no housing appreciation for years because of job insecurity and lack of job creation, inflation not a worry for years also, i'm hoping we don't pull in the stimulus, raise rates too soon for risk of a japan type lost decade. thinking quantataive easing will need to be around for longer than most think, people will save for a few months and then buy things giving rise to green shoots theory but they will remain green shoots for years, oil will come down plenty, cycical bull/bear trends large trading range, i can't think of a catalyst to propel animal spirits, rates can't go lower, credit will remain tight, e-business, info tech is old school, we're in for a long slow drag, like early 60's, hoping to catch a mild retest of lows, 800-850, maybe 700-750,
any comments to my ideas?

[chainik]

I'll be traveling for about a month, and I don't think I'll miss much. FWIW, a few WAGs.

1. Boring, low vol trading range in summer. Good for trading, bad for Jerry :)

2. One more solid bottom in 2009, probably in the fall (maybe in October, SPX 800-850?). At the bottom, at least some of the indicators, such ROBO P/C, OEX P/C, and COT will signal excessive pessimism, but there will be no panic like in March. Ideally, insiders will start buying again.

3. >30% rally into May 2010. SPX 1100, maybe even higher. "Green trees, revival, recession is over".

I'll concentrate on catching the bottom, the rest is not that important. Will try to buy FSNGX below 20, GDX below 30, miners, Russia and Asia. I think gold and TBT will do well.

What do you think?

[Lone Ranger]

c,

any current thoughts? tia

lr

[chainik]

Contrary to the plan, covered all short positions today and bought some EWS.

Was spooked by an intraday spike in EPC and by very low OEX P/C (stayed around 0.5 all day).

[chainik]

Curious numbers from Hulbert. If both smart/lucky guys and idiots are long, who is going to buy? (g)

http://www.marketwatch.com/story/agreement-between-best-and-worst-newsletters

[chainik]

More or less same here. The fake above 950 smelled real bad, but it was difficult to short. Green shoots, green xxxx...

The pullback is the best case scenario. Should be bought IMO, but not before reset in a number of intermediate-term indicators like OCC and OEX P/Cs, insiders, COT. SPX 850 might be enough.

Same shopping list as before: GDX and junior gold miners, natgas, nilsy, mtl, RSX, EWS and Asia in general.

[Jerry Olson]

C:

i am betwixt and bettween right now...looking for a "normal" pull back not anything too harsh as yet.

waiting to see if they take out 900 SPX for now..

volume is dead stopped..

so doing very little trading right now...

[chainik]

More clueless than usually. Was somewhat short, now net long, but afraid of any major new commitments :) In general, I don't trade a lot during expiration week.

The fingers are itching to short, but there might be a lot of artificial moves at the end of quarter. Don't see any high probability trades.

The plan is to buy (mostly Asia) below 890. If the market moves higher into early July, will probably reluctantly short.

IMO it is still not a bad idea to buy for the long run, but insiders are selling, most of P/Cs are still a "sell", last COT looks fishy.

Nasdaq oscillator looks bearish, so you are probably cautious?
http://stockcharts.com/charts/indices/McSumNASD.html

[Jerry Olson]

C: what are you up to these days???

[chainik]

"PG-like" means PG and something similar :)
I am reducing risk exposure; have nothing against holding PG for years.

It is Grantham's suggestion; you need to register http://www.gmo.com
The first table "GMO 7-Year Asset Class Forecasts (May 2009)" is pretty interesting IMO.

[Lone Ranger]

c,

my question re. aj was a flip quick response. it was meant to be an obvious joke. guess i won't quit my day job. i didn't realize that type of "foolish" question would create a stir. <g> thanks for reply

"PG-like stuff." ?????? what's that?

[chainik]

Didn't answer your question about aj - RCKS did. It's a pity that aj is gone, but ihub has degenerated into a garbage dump anyway. Hope there will be less bs on LG's site.

Don't have a strong opinion about the markets. Everybody is in the same reflation-sell $USD-long commodities-buy the dips trade. IMO, a lot of different pieces (insiders, OEX PC, weakening breadth, EPC, overbought NDX, oversold $USD, too much optimism towards gold, big inflows into emerging markets, speculation in junior gold miners) are pointing to a correction, but so far "buy the dips" rules...

In longer-term accounts I've been shifting from riskier stocks and ETFs into cash and PG-like stuff.

I am betting on a correction within the next few days. Have a bunch of QIDs in trading accounts, all under water, but stops haven't been hit yet. Silly trade, I am afraid.

Was (and will be) busy, don't follow the markets closely these days.

[Lone Ranger]

c,

you still out there? any thoughts? are you posting anywhere else? thanks

[Lone Ranger]

Rcks,

The following post I made was stupid:

{{{c,

is AJ caught up in the BS with Matt? Haven't seem his post for awhile?
thanks}}}

I am mainly a lurker on AJ's site and I did NOT mean to imply or infer that AJ did anything wrong. Only the time coincidence lead me to the inconsiderate post. In all of my contact with AJ, which is exclusive to his site, he treated me fairly. I have no criticism of AJ whatsoever.

Lone Ranger

[Lone Ranger]

Rcks,

Thanks.

[RCKS]

LR
aj is posting on LG's site.

http://thechartologist.com/

[Lone Ranger]

[Lone Ranger]

c,

is AJ caught up in the BS with Matt? Haven't seem his post for awhile?
thanks

[chainik]

Don't know, as usually.

On one hand, as Grantham writes, time is running out for the bears - there will be some recovery by the end of the year, and the market might run to 1000-1100 (Faber's expectations as well). Grantham is probably correct about SPX fair value (880), so there is nothing wrong with buying here for the long run.

On the other hand,
1. Intermediate-term (weeks), there still seems to be too much enthusiasm. CBOE EPC, ROBO PC, OEX PC, and insiders are all "sell".
2. Defensive sectors are doing well (a sign of return of risk aversion?).
3. A lot of articles around (including a cover in Barrons) about bear market in bonds; sentiment towards bonds is negative as well. A bond rally might coincide with a general market drop.
4. As far as I understand, Zulauf and Dalio expect to see SPX 400-500 at the bottom, maybe in 2010 or 2011.
5. A lot of room to fall here:
http://stockcharts.com/charts/indices/McSumNASD.html

Thanks to Jerry, I raised a lot of cash :) The general plan is to sell 950 and to buy 850.

I am more interested in shorting next week, and probably will try long trades at the end of May, but this is just a WAG.

I think new lows are very unlikely this year.

I would like to see a mild decline (maybe below 800?) in June or July, followed by a strong rally into the end of the year. Obviously, just a guess; useless for trading.

[Lone Ranger]

c,

Thanks for the reads. What are your current thoughts? Do we retest the recent highs or lows ?

[chainik]

I like this one as well.
http://online.barrons.com/article/SB124216547946012487.html

[Lone Ranger]

c,

very good indeed.

[chainik]

Nice one:

The Last Hurrah and Seven Lean Years
Jeremy Grantham
http://www.gmo.com/

[chainik]

I've been selling as well.

Nice broad rally; Faber and Jeremy Grantham are talking about SPX 1000-1100 by the end of the year. On the other hand, plenty of signs of excessive speculation. Insiders are very bearish, OEX P/C is a "sell". I hope to see significantly lower ROBO P/C tomorrow. Folks on the boards are still rather cautious IMO, but there are more posts like this (borrowed from aj's board):

"To keep it simple, throw the charts away, the Larger that Large Boys made decision to pump Dow to 9000+,10000+_ect. They are pumping/pumping and will not fail because they can print money faster than any sell button".

[Lone Ranger]

c,

i foolishly sold a little today. hope foolishness begins working again :)

[chainik]

Everything trades together and everything is due for a pullback, but this is a consensus...

NDX weakness is interesting, might be the top - remember the 40+ posts day? :). Semis are weak as well.

Insiders are selling like in October 2007. Hard to be too bullish looking at these numbers.

[Jerry Olson]

C:

looks like RSX is due for a pullback it's right at R...

[Jerry Olson]

hahahahahahaha

yeah well maybe...not sure just yet

WFC was awesome

[chainik]

Yep, sold too early, especially EWT.

BTW, don't you think that 40+ "woohoo monster to the mooooon" posts today might mean correction? :)

[Jerry Olson]

I TOLD you not to sell RSX?<G>

[w0zz]

Anyone here know what happened to Justa?

[chainik]

<My wish list for the early summer:

SPX 900
RSX 20
EWT 9-10
QLD 40>

Almost there (except for QLD). Raised more cash. TRF is at 20% premium to NAV (who the xxxx is buying?).

No good plan. Don't like to stay too long, don't want to short aggressively, don't want to buy dips.

I'll stick to short-term (1-2 days) trades only; mostly QID and, maybe, QLD.

[chainik]

I am getting (irrationally) confident that what we are seeing is the squeeze of the last drops from the long side, and the next 5-10% move will be down.

Very strong close would make it too easy, and, therefore, IMO it is unlikely. I am selling for a trade.

[Jerry Olson]

ok cool

we'll see...

[chainik]

I sold too early...In general, I am selling and looking for an opportunity to short in longer-term accounts. Won't buy anything without a substantial pullback. Too much dip buying.

For short-term trades (1-2 days), "reversion to the mean" works very nicely :)

I think NDX will break out today, and, looking a few days ahead, this will be a good short.

[Jerry Olson]

RSX still looks great here C...might get to 21.00

[chainik]

Interesting blog:
http://tradingtheodds.wordpress.com/

[chainik]

Agree with you. Feels like expiration bs, but it's hard to be too confident when everybody thinks this way.

I've been selling, bought some QID. Still long, but more interested in shorting, at least for a trade.

Don't have a strong opinion. Maybe 800-870 trading range for a month, "short the breakout"? Again, not a terribly original plan.

I would be very interested in gold at lower levels, but right now it looks like a short.

[Lone Ranger]

c,

i guess ops exp screws with the timing,

"I think this is the first time ever when J. is "confident" about anything :) "

does this make you more of less confident in his prediction :)

i'm looking for at least a short term top also but it seems like everyone else is too

[chainik]

<I'm confident that we will be rolling over heading into next week>

I think this is the first time ever when J. is "confident" about anything :)

[chainik]

I think he is looking to short early next week if the markets goes a bit higher.

[Lone Ranger]

c,

i think i get it now

[Lone Ranger]

c,

any thoughts on jason's latest update? is that bullish or bearish? i'm confused s usual :)

[chainik]

Some of the more reliable intermediate-term numbers (insiders, OEX, OCC retail P/Cs) are approaching "sell" area. Starting to look dangerous to me.

Sold some QLD and all trading positions in RSX and EWT; bought QID as a partial hedge.

The general plan is more or less the same:

1. Sell more QLD around 32-36;
2. Accumulate Asia on weakness in long-term accounts;
3. Look for an opportunity to buy gold miners, ideally at GDX<25;
4. Russia and commodities are becoming too popular; no more dip buying here, at least for the next few weeks.

For short-term trading I'll try QLD/QID.

[Jerry Olson]

RSX EXPLOSIVE HERE

[chainik]

Smart Faber thinks C is going to 5.