Down 200 points, then 2 days later up 200 points, then 4 days later down 150 points, then 3 days later up 150 points.
A 1 month chart of the S&P 500 below - we're at the identical spot we were almost a month ago. Showing us on the path to nowhere. Nothing but a traders market. The only people making money are brokers handling the trades. It is getting mighty monotonous at least from this seat.
Here is a 2 month chart below. Yes we had that dip in mid July, and if you bought it and flipped out in a few weeks you made some change, but we are EXACTLY where we were 2 months ago as well. Churn.
A lot of punditry analysis day by day about why the market is up by this amount or down by that amount, and why that day's action "signals" a bottom in this or a top in that. But when you take a few steps back, you see complete random action leading to nothingness. Volume falling off a cliff these past 2 weeks. People abandoning (or vacationing) this randomness where no trade is safe for more than a few days or weeks at most.A trendless market that is signaling nothing other than it is clueless. Sorry, I'm not jumping up and down and screaming how today's rally once again signals this or that. It signals the same thing it's been signaling for 60 days: nothing.
7 comments:
Clueless market indeed. As I have stated before: never have so many spent so much time on something they have absolutely no control over. The amount of time that is spent in analyzing and calling the bottom and prognosticating is incredible. We pretend it matters, but in the end, I question whether it really does.
And the best thing you could do for yourself these past two months is turn off the computer and go to the gym.
It is amanzing!
Guy I agree
I sit here and when the market turned up today I said to myself, I better follow my status quo and cut back on my short exposure
Then I said, you know what I've done this about 25x the past 2 months and each time it reverses within a few days so why bother anymore
What is hot today turns cold soon, and vice versa.
I'm so effectively hedged now I make 0% every day ;)
Should just be 100% cash at this point; less work.
Just sitting and marking time. Boring.
For what it is worth here, I will stick my neck out and make my own market "call": if breadth does not improve, I give this price cycle 2-3 more weeks; lousy market breadth in the face of neutral or bullish sentiment generally leads to a failing rally.
What rally am I talking about? If you go back in your posts, I was calling for a rally starting in early July (july 3 to be exact). But this has not been a humdinger of a rally but a respite from the downside pressure --it looks like that for now.
We shall see how the data shapes up over the next couple of weeks.
That's how I'm positioning as you can see.
Unlike the Bear Stearns bailout rally in April-May this rally has no leadership. Volume is completely gone to boot - could be the vacation thing but my own belief is too many people are getting burnt trying to put on positions only to see them reverse within 48 hours. After touching the stove so many times you get tired of it.
even healthcare stocks are stinking up the joint in many cases the past 2 weeks - the biotech ETFs are selling off for 10 days straight after being the one leadership
unless we're to believe retail, houses, and financials are leadership this is a farce rally.
I'm awaiting the retest of July 15th - we'll see.
At this point my strategy is to allocate dollars into panic and then sell into the upticks. That seems the only way to catch a trend that lasts more than 2-3 days. It is sort of the exact opposite of a bull market move, i.e. buy the pullbacks to support and let it ride. Now its buy the panic (trying to guess where the bottom will be) and sell on the oversold rally.
I do continue to be amazed when 15 data points say something negative but 1 is positive everyone clutches to it as the savior.
Clues to a reversal: someone on CNBC will use the "r" word to describe the market; what is the "r" word? RESILIENT!!!
Or when someone says on CNBC that the markets are just waiting for the big boys to come back in September.
historically..septembe ris the worst mrkt of the year..so maybe the july retest will come next month..
This is a perfect market for buy low and sell high ;-) cus the lows won't go lower and highs won't go higher. Play with uwm/twm, sso/sds, qld/qid, ddm/dxd is easy. No need to worry about all the crappy real stocks.
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