While the topping action so far is somewhat reminiscent of last
summer's top, I warn that the ensuing sell-off has the potential to
be quite a bit more vicious. Why? Last summer had
institutional restraint -- by this, I mean that not everything was
liquidated (in fact, CMG, LULU, AAPL, PCLN, GDX barely took a hit
at all). This summer is different. AAPL is selling off
hard and despite record earnings and bright prospects, it is
getting hammered. Same with gold stocks -- hammered and
liquidated. The institutional support is cracking and is
clearly seen in gold stocks and "can't lose tech". So while
some are thinking of a great buying opportunity at the 200 day MA,
if this follows a 2008 style recipe, something much worse could be
in store. Also different from last summer is the extent to
which institutions are seeking "early safety" in long bonds,
utilities, dividend payers -- almost ridiculous. They are
preparing for something big.
Posted by frtaylor on 12th of May 2012 at 08:34 am
I get a free video from another technical trading site, and one
of the two traders had a video showing that a favorite indicator of
his, in addition to price action, suggests a 200-point move coming
next week or so. Of course, the indicator doesn't say which
way the move will go. I'm trying to be prepared for either
direction.
Posted by frtaylor on 12th of May 2012 at 08:47 am
Reviewing the video now. Actually, the price action on the
monthly chart and weekly chart both suggest the big swing is going
to be to the up side. Under this scenario, we might get a bit
more weakness and then trend higher again. This would be in
agreement with the article (posted here by someone) about June up
moves during Democratic Presidents' re-election years. Bottom
line, as usual no way to know which way for sure.
You remind me of him. You are presenting the bear case
exceptionally well (although I think we are very close to a bottom
myself). My question to you are you making any money? Are you
short? Personally I don't find shorting consistently profitable so
I rather step aside and wait till I see bearishness reach these
kinds of extremes (put/ call ratios , AAII sentiment readings etc)
and then start averaging in longs. Next week I plan to be fully
invested again by the end of next week (assuming VIX spikes up good
one more time).
My point? I quess I wonder if being able to predict such dire
outcomes has ever made anyone any money? I don't think Marketguy
ever did.
I forgot about him. I felt for the guy. So set in his opinions
though. Reminded me a bit of the guys on financialsense.com. Always
beating the drums for the bear case. Personally I make money short
and long. As a trader, I don't think it is productive being too set
in any one view. Always be prepared for what the market throws at
you. Right now is definitely bearish but I feel that there may be a
bottom around here. The last few days action in the ES does look
promising. Bears trying to push lower but constantly getting
battered by the bulls buying up around the 1340-45 level only for
the bears to get the upper hand around the 1360-65 level. I have
dipped my toes in the water at these levels for about 3 such trades
this week both long and short and it has proved very nice. I love
it when the market behaves!
I am carrying some euro futures shorts over the weekend. Right
now I think that the market is waiting for another eurozone
debacle. I am thinking that this may invoke some panic selling
which should lead to a spike and then bounce back up. That's my
tentative thoughts atm, but who knows.
and spike in the VIX should lead to a very good bounce at the
very least. Maybe a test of the highs who knows. I am short the
euro from 1.3244 and may close half this week.
Comparison to last summer
Posted by kalinm on 11th of May 2012 at 04:59 pm
While the topping action so far is somewhat reminiscent of last summer's top, I warn that the ensuing sell-off has the potential to be quite a bit more vicious. Why? Last summer had institutional restraint -- by this, I mean that not everything was liquidated (in fact, CMG, LULU, AAPL, PCLN, GDX barely took a hit at all). This summer is different. AAPL is selling off hard and despite record earnings and bright prospects, it is getting hammered. Same with gold stocks -- hammered and liquidated. The institutional support is cracking and is clearly seen in gold stocks and "can't lose tech". So while some are thinking of a great buying opportunity at the 200 day MA, if this follows a 2008 style recipe, something much worse could be in store. Also different from last summer is the extent to which institutions are seeking "early safety" in long bonds, utilities, dividend payers -- almost ridiculous. They are preparing for something big.
I get a free video
Posted by frtaylor on 12th of May 2012 at 08:34 am
I get a free video from another technical trading site, and one of the two traders had a video showing that a favorite indicator of his, in addition to price action, suggests a 200-point move coming next week or so. Of course, the indicator doesn't say which way the move will go. I'm trying to be prepared for either direction.
Reviewing the video now. Actually,
Posted by frtaylor on 12th of May 2012 at 08:47 am
Reviewing the video now. Actually, the price action on the monthly chart and weekly chart both suggest the big swing is going to be to the up side. Under this scenario, we might get a bit more weakness and then trend higher again. This would be in agreement with the article (posted here by someone) about June up moves during Democratic Presidents' re-election years. Bottom line, as usual no way to know which way for sure.
Kalinm, do you remember a guy who's moniker was " Marketguy"?
Posted by tomW1 on 12th of May 2012 at 12:18 am
You remind me of him. You are presenting the bear case exceptionally well (although I think we are very close to a bottom myself). My question to you are you making any money? Are you short? Personally I don't find shorting consistently profitable so I rather step aside and wait till I see bearishness reach these kinds of extremes (put/ call ratios , AAII sentiment readings etc) and then start averaging in longs. Next week I plan to be fully invested again by the end of next week (assuming VIX spikes up good one more time).
My point? I quess I wonder if being able to predict such dire outcomes has ever made anyone any money? I don't think Marketguy ever did.
Marketguy
Posted by payday on 12th of May 2012 at 04:04 am
I forgot about him. I felt for the guy. So set in his opinions though. Reminded me a bit of the guys on financialsense.com. Always beating the drums for the bear case. Personally I make money short and long. As a trader, I don't think it is productive being too set in any one view. Always be prepared for what the market throws at you. Right now is definitely bearish but I feel that there may be a bottom around here. The last few days action in the ES does look promising. Bears trying to push lower but constantly getting battered by the bulls buying up around the 1340-45 level only for the bears to get the upper hand around the 1360-65 level. I have dipped my toes in the water at these levels for about 3 such trades this week both long and short and it has proved very nice. I love it when the market behaves!
I am carrying some euro futures shorts over the weekend. Right now I think that the market is waiting for another eurozone debacle. I am thinking that this may invoke some panic selling which should lead to a spike and then bounce back up. That's my tentative thoughts atm, but who knows.
I tend to agree with you that one more panic selling
Posted by tomW1 on 12th of May 2012 at 10:12 am
and spike in the VIX should lead to a very good bounce at the very least. Maybe a test of the highs who knows. I am short the euro from 1.3244 and may close half this week.
something to consider
Posted by rose123 on 11th of May 2012 at 07:11 pm
http://stockcharts.com/c-sc/sc?s=%24CPCE&p=D&st=2007-02-16&en=(today)&id=p08923241661&a=176209081&r=911
this as well
Posted by rose123 on 11th of May 2012 at 07:19 pm
I'm sure institutions are weary
Posted by steve on 11th of May 2012 at 05:36 pm
I'm sure institutions are weary of the US fiscal cliff looming at the end of this year and are taking measures as a result.