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well, i didnt exactly stay out as i said i would. two buys triggered, one qqqq and other xlf. these went in shortly after the first successful test of the 200ma on the s&p.
It is that, as well as...
-Based on filings, insiders are selling
-Based on fillings, institutional ownership in banks are decreasing (in facts, banks are dumping ownership of each other)
-Nasdaq has been outperforming S&P (speculators at work)
-Nasqaq/Nyse volume ratio is also indicating increased speculative activity.
-And recently, i have been watching the TICK on longer term basis. It has been generally trending down for some time now. Meaning, even though prices continue to climb, under the surface..there is broad selling as well.
None of these are screaming "GET OUT NOW!". but i think they are warning..
There a few others i can't recall at the moment (i'm working on about 6 hrs sleep since sunday, lol. bloody london hours!)
I guess i am thinking whether i should be abandoning my "buy the dip" stance and simply step aside or be a bit agressive and short.
I wanted the 200MA on the S&P, i got it.
I wanted to see sentiment and confidence increase and i think that is here also.
I want a some downward movement that does some technical damage, and i think that may come.
Combine all this with what is going on underneath (where it appears big money has been selling slowly to the little guy), the recipe may be right for a top.
...we saw everyone harping on the fact that the market had no business running up due to the data they were seeing. Now i think the bulls are going to yell even louder "the bottom is in! and we have the data to prove it". the contrarian trader that i am thinks that is a nice setup to go short.
just thinking right now though..
Just thinking out loud...
does anyone think we are entering the 'sell the news' phase of this market?
We had a powerful 3 month run despite horrendous data week after week.
Now we are starting to see some data showing some things are improving. should we now do the opposite and start selling this 'good news' data?
my thinking is, the rally we saw in the last 3months was pricing in the data that is STARTING to come out, which would mean we should be cautious on the long side.
Yes i believe it is.
i used that pop from housing sales datat
to exit. not in a hurry to place another bet yet...will let that bradley minor turn date pass first i think.
Yeah, based on recent history, it's definitely not a good thing when the BKX finishes down while the market has strong day. I had some sell limits today (greedy exits as i was looking for dow to be up +300 by EOD), never kicked in it seems.
Hoping we get a follow through early to allow for a higher exit, though at this point, i think as long as i exit some time tomorrow, i'll be able to lock in profits rather than 'cut loss'.
I probably wouldn't chase it, but yes, i am still in the 'look for dips to buy' mode. Today certainly won't paint a technically negative picture on the daily unless there is a serious sell off by EOD. Afterall if we close at current levels, it will be the first ime we are closing above the 200MA in long time. To many traders, long term bullish and bearish bias is defined by that line.
The day started off strong, but it is not looking so strong during this 2nd half of the day.
i don't like the fact that the BKX just turned negative.
I wonder if that is in reaction to the TNX moving back to it's highs?
This market seems to have a habit of finding buyers on every dip however, until that proves not be true anymore...i would bet on dips being bought.
10 year looks like it was back near it's highs again today.
..and looking closer, it seems once again more it did so just before 1pm, and currently is backing off. sure looks like these things are manipualted sometimes...
At one point several months ago, the 200MA porjected to around 950 area i believe. today it was just under 930 and so far, we have convincingly taken that resistance out.
The nearest significant resistance after that was the January highs of 943.85. That is currently under assault, with the S&P trading just above it, currently.
Overall this seems to be a strong day...with TICK for the most part remaining in postive territory, breadth strong, and right now..consolidation near the highs.
The one fly in the ointment...why is the VIX trading up on a day where we are nearly +3%? One might interpret that as...we are having a strong bounce, but it's not really doing much to allay fears, or at least make investors feel any more comfortable than they were last week.
At the risk of causing you more grief...well said.
now hatelosses, don't go labeling the board again, i just like how well the lady composes and presents or rebuttals. I hope you stick around...keep us in check if you will.
Even reits are making higher highs here. Many reits are taking out their 3 month highs. wondering what that is pricing in...if anything.
looks like a strong day all around...if we get a repeat of friday where buyers came in in the last 5 minute..we could see 300+ today. Of course, friday was month end...
Two more things that would help confirm any breakout.
Have a look at the 10 MA of the NYSE A-D line as well as the cumulative TICK.
After the bottom in march, both spiked upwards, as you would expect. They did this for only about three weeks however and have since been trending sideways to down (diverging as the market moved higher). That has been one of the intermediate term warnings i think that you have to trade this market and not bet to far out. If we are in the process of breaking out with the next leg up, it would good to see these also making a higher high.
thanks!
It looks like today we may breakout of the wedge we have been in for the past few weeks and we may test (and break) the 200MA resistance on the S&P.
I am not sure if this link below will work. I hope it does as this is new promising site for charting. It requires that you install Microsoft Silverlight when prompted. They still have some work to do (i.e. i think their calculations for RSI is off).
http://www.freestockcharts.com?emailChartID=e8e9f47a-c782-4e63-87f1-e5d5e4db94ea
Note in the above chart that while we are about to apparently breakout of a wedge and assualt the 200MA, the MACD histogram is still under zero. My gut tells me we blow through the 200MA, lure traders in, then begin the retrace. That is my gut, and of course i don't like trading always on my gut...
So i'll be looking at these things to confirm the move
-There likely will be a snap back retest of the 200MA once we break it, it needs to hold to within 1 or 2% below.
-There should be an expansion of new 52 week highs as we break the 200MA. Clearly we are still far away from a 52 week high in the market, so you are not going to see huge numbers here..but still there should be an expansion. In fact, if you have the ability to look at the number of 3 to 6 months highs, that might be better.
-VIX should make a lower low.
-If institutional investors/traders are going to buy a break of the 200MA, likely they will be buying insurance in the form of puts. I would expect then that we should see a spike in the put/call ratio.
-and of course volume. blow off top type volume to be exact...
wel said, well said!
We should distinguish between economy, policies and the stock market market. they each move to different beats i think.
I don't like the policies and practices by our goverment. I also think our economy is not well, though it may be getting better (if this rally we have been seeing is a true rally and the march lows hold). I am bullish on the stock market and have been so for some time now.
I think within the next month we could see an interim term top. This is not me just opining out pessimism, it is what i am seeing.
You just need to do a price and volume study of nasdaq vs S&P and you will see that speculators are at work heavily here.
We need speculators early in a rally. However, when they continue to dominate and increase their presence after the rally is well underway, it is often an indication that an intermediate term top is come. Big money is slowly selling to little money, fuely the run. It will continue for a bit more, until there is nothing left to sell to the little guy.
Unless those things change, i think we are in the topping process. That said, i will continue to buy dips until the charts show technical damage.
With the seasonal bias (see stats showing market perf 1 week after memorial day weekend) and end of month buying out of the way...what does next week hold?
worse the news/outlook, more you buy...seems to be the best strategy. I'd hate to start seeing some good news...why ruin a good thing? lol.
have a good weekend all.
Interesting how it spiked before the auction (1pm), and collapsed right afterwards. I wonder if there is some manipulation there - attract buyers, then drop it to favor the market.
Well, the fun is about to start again..almost 1pm. Yesterday it took financials about 30 to 40 minutes to realize that things were not going well...today they are anxious heading into the acution for obvious reasons.
I really am fascinated by these types of volatility. I recall pointing out the number of 5% swing days in the Equity and over 2008 and 2009 and noting the last time we saw such clusters were back in 1929/1930.
Now here we are again, seeing but this time with the 10 year note, and in clusters that have never been seen before (well not as long as we have been capturing this data anyway).
I noticed the 10-Year spiked above 5% today (err yesterday).
It looked like shorty after this spike occurred was when the market began it's sell off in the afternoon.
I looked back to see how many times this has happened and how the market performed afterwards.
Interestingly, Yahoo has data from the 1950s for the TNX and S&P. But i could only find 5% spikes starting in the 1980s. What's even more interesting (at least to me) 13 of the 20 previous occurrences happened in 2008 and 2009. In most bases, the market was trading lower shortly afterwards (i.e. in 16 of the 20 prior occurrences, the market was lower 15 days later). Now given that most of these occurrences were last year and this year (bear market) i am not so sure how much i should weigh this over the next few weeks.
anyone have any thoughts on this? (im not really a fundy guy as you know, but i imagine there is a rational as to why traders started paying close attention to the TNX over the past few years. I can guess that it is likely something that affects both bond and commodities traders..would that be a correct?)
raw data...
Ticker Date/Time Close TNX TNXChg PctChg N1 PctChg N5 PctChg N15 PctChg N30
^GSPC 2/19/1980 114.60 12.85 5.06 1.63 -0.54 -5.95 -10.84
^GSPC 4/4/1994 438.92 7.15 5.31 2.13 2.49 3.14 2.38
^GSPC 3/8/1996 633.50 6.41 5.46 1.03 1.25 1.89 2.27
^GSPC 12/5/2001 1170.35 4.90 5.10 -0.28 -2.84 -1.13 -3.65
^GSPC 1/2/2003 909.03 4.03 5.21 -0.05 2.04 -5.24 -8.16
^GSPC 7/15/2003 1000.42 3.91 5.12 -0.63 -1.23 -3.49 -0.37
^GSPC 4/2/2004 1141.81 4.14 5.80 0.77 0.30 -0.55 -5.05
^GSPC 1/24/2008 1352.07 3.64 5.77 -1.59 1.96 -0.24 -4.34
^GSPC 3/24/2008 1349.88 3.52 5.40 0.23 -2.01 -1.60 4.27
^GSPC 9/19/2008 1255.08 3.77 8.75 -3.82 -3.33 -28.35 -22.81
^GSPC 9/30/2008 1164.74 3.83 5.22 -0.32 -14.47 -18.00 -22.82
^GSPC 10/8/2008 984.94 3.71 5.39 -7.62 -7.83 -5.57 -18.11
^GSPC 11/24/2008 851.81 3.34 5.09 0.66 -0.35 7.20 6.80
^GSPC 12/31/2008 903.25 2.24 6.70 3.16 0.72 -7.89 -8.46
^GSPC 1/2/2009 931.80 2.42 7.44 -0.47 -4.45 -10.22 -15.31
^GSPC 1/21/2009 840.24 2.53 7.11 -1.52 4.03 -0.77 -18.77
^GSPC 1/28/2009 874.09 2.66 5.26 -3.31 -4.79 -10.89 -14.11
^GSPC 1/29/2009 845.14 2.82 5.67 -2.28 0.08 -8.88 -10.48
^GSPC 2/13/2009 826.84 2.88 5.21 -4.56 -10.10 -18.18 -4.75
^GSPC 4/3/2009 842.50 2.91 5.50 -0.83 1.93 1.78 7.98
^GSPC 5/27/2009 893.06 3.69 5.42 0.00 0.00 0.00 0.00
i know i am probably the most stubborn person on this board right now...as i am still forcing myself to think "buy dips".
I still believe shorts have to be more 'scalp' like trades.
I'd like to see the S&P eventually test it's 200MA above and fail, or i'd like to see S&P 875-8 on the S&P give way before moving more towards the bear camp.
given today's close, esp w/ regards to BKX and XLF, which closed near their lows while the market made a slight rebound at EOD, i would not be surprised if we head lower early tomorrow. If that happens we'll get to see if there are still buyers out there...i think there are.
all that said, i would say i definitely less bullish than i was a couple weeks ago.
GS was one of the few financials that was strong for most of the day. at this moment however, it looks like it will close down and possibly trigger an st sell.
u probably will think im a flip flopper since the last time uasked about uso i said i thought it would go on to make a higher high. it did...
the problem with today is that candle that is showing at this moment. if uso closes like this, some refer to that candle as the 'cross of death'...lol. its not that bad, but it does indicate indecision and an inability to attract buyers. so id expect a retrace.
xle i would not buy unless it can take out 50.60 area solidly. that chart is running up against its 200ma for the third time...it is almost screaming to short it for a short term trade.
my opinion
how did the auction do today?
anticipate the best but prepare for the worst?
i think the general consensus around here is that we are nearing an interim term top in the june/july time frame..
i think it may be near, but not sure of its severity...will guage that based on how much of the bullish technicals are undone.
im mostly cash..though i have left the hedges/insurance in play.
Professional and institutional traders just came into work after a long extended weekend. lol.
The problem with all this is that the market rarely every moves to this tune (fundamental approach to valuation)...Market fair value follows a much more K.I.S.S model.
In short, MARKET "Fair Value" is really perception...that price that someone is willing to buy after having having absorbed all that is going on around him.
Your comments about "nostalgic earnings" is interesting. If you do not factor in history, then how do you guage value?
If you say that P/E today is 120, then what does mean without having history to paint some context around it?
It's interesting really...i can accept that arguement that fundamental valuation should be based on current and/or future earnings; but it's ironic that we take that data and guage "too expensive" and "too cheap" based on historical multipliers.
In technical analysis, it is often best to use an average over a certain period rather than look at a single point and try to extrapolate too much from that.
Don't know what the norm is in Fundamental analysis however...
Exited positions in spy and xlf i have had for several weeks...locking in profits.
i have no idea...the abnormal option volume caught my attention. it has now rallied another 14pct since my last post.
either this is the last attempt to herd the lambs into the slaughter house, or a deal was struck to avoid bankruptcy and someone is trading ahead..front running.
as i was contemplating scalping gm on the long side...the stock just recovered about a 10pct loss only a few min ago. ah well...
it caught my eye earlier as the june 1 calls are showing heavy volume. some one gambling that gm will survive, while at the same time, overall investor sentiment seems to be that it is done; open interest on june 1 strike is more than 3x heavier on the puts side
Consistently right is preferable...lol
lol..hardly secret. i enjoy it though...in the absence of conflicting signals, it's good to have some stats to tip the scale in one direction or the other.
i write and run them myself...as long as you have the data, really you can run all kinds of statistical studies.
hmmm...i actually did check the performance of the friday before memorial day. the friday before memorial day was a crap shoot...50/50 odds of finshing green (just the one day performance between previous close and that friday).
what i didn't check was buying friday and selling N days later.
I also have to check whether the study i posted bought the open or close of tuesday. will do that this weekend.
Interesting study...
Since 1951, if you bought the S&P on the tuesday following memorial day, and sold 5 days later, you were on the winning side 73% of the time (56 trades, 41 winners, 15 losers).
Their daily relative performace to the S&P has been something worth watching..when they show strength while the market shows weakness, generally it has been good to go long the market. We'll see if that holds true tomorrow again...
who wants to bet on citigroup? apparently a lot of options trader do. Ameritrade showing the highest option volume are coming from the june and july contracts at a strike of $5, both puts and call showing heavy volume. i am not sure if these are hedges or just simply gamble plays. i think the puts might be hedges, but the calls are pure gambles, considering the are selling way out the money at 5 and 11 cents respectively.