If you just found us in the past 8 weeks, trust me - it's not always like this; and soon enough the market will make me look foolish again. It's been an epic hot streak. I think I'm about +13% in relative performance versus the market just the past 2 weeks alone. Still sitting at about 50% cash.Part of me says go 100% cash and come back March 1st; I know Mother Market wants to exact her revenge on me any day now. That would make for a boring blog though. ;)
Jan 21st: In 100% cash. Check back tomorrow.
Jan 22nd: Yep, cash again.
Jan 23rd: I'm staring at my cash, come back tomorrow.
Jan 24th: Cash cash cash.
Jan 25th: See Jan 24th
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As for the S&P, she is going to make us bite our nails - didn't recapture S&P 850 as those darn financials turned bad again at the end of the day - this time they hit JPMorgan (JPM). Still in range 2 (S&P 820-850)
Back at it tomorrow - pandas, penguins, and bunnies. Off to knock some (frozen) wood.
7 comments:
This article should put a smile on your face (This guy make Roubini look like a Pollyanna) :
Depression ahead, prepare for stock rout: SocGen
* Thursday January 15, 2009, 7:32 am EST
LONDON (Reuters) - Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode.
In a highly bearish note, veteran cross asset strategist Albert Edwards said investors should now cut equity exposure after a turn-of-the-year rally and prepare for a rout.
He predicted that the S&P 500 index of U.S. stocks could be set for a fall of around 40 percent from recent levels.
Edwards also raised the danger of a global trade war with China.
"While economic data in developed economies increasingly reflects depression rather than a deep recession, the real surprise in 2009 may lie elsewhere," Edwards wrote.
"It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression."
jegan
TM,
Here's the strategy that seems to work... remember on a previous post when you said the Obama mania could take us to 950, 100, or 1050 depending on Obama Optimism (aka OO)... and you were cutting exposure as we went up...
well it turns out I have found time and time again that it is time to sell/go short at the first major resistance as long as there isn't a very strong volume move... stop out with very low risk and then repeat at the next resistance area (or if the market fails before then)... and continue... until heavy volume buying steps in or a true flush out has occurred.
You have been very good about this... sell resistance and put the honus on the market to prove it can surpass it... If we bounce next time we don't see 950 so maybe short around 900 if we get that high,,, thoughts and rambles..
Also for those interested check out my post on the Yellow Street Beat on Double Inverse ETFs... note how sweet the short covering rally at the end of the day was for shorting SRS and SKF.... 15+ in one day... though I admit I was not able to trade so did not take advantage of it but this is the kind of thing we try to look for as we learn from each other... perhaps a follow up post on ETFs in the future to iron out any missing pieces...,,,.
"stop out with very low risk and then repeat at the next resistance area (or if the market fails before then)... and continue... until heavy volume buying steps in or a true flush out has occurred."
That is the strategy if the market is able to break resistance. Otherwise a nice trade....
roses, the way these ETFs are designed I am thinking they might all go to $1
look at SRS, the last time URE was here it was in the $240+
now SRS was in the $70s
They are truly horrific instruments for anyone with time frame longer than 1-5 days.
Good job on your call and yes, I believe our trend is now broken and we will roll over - this "upswing" will (in my thoughts) need to be sold/shorted - unlike the late Nov/early Jan run. I am hoping for 900 myself but 875 and above would be good.
I'll be working on individual short lists now that I have it available... so many options. But we're not even out of the woods here, we could open below S&P 820 or end there tomorrow - which means today's rally was nothing.
We only "rallied" to where we closed yesterday; it just felt good because it was a technical reversal that institutions love to play.
Aside for my penchant to short anything with a big dividend. I think I'll either go a Leap/put or short SHLD. It's got a heavy short following right now at about 15%. But it's hitting a nice flat three point, three month upper trendline after reporting what I consider to be bogus numbers based on financial maneuverings. It's still just Sears and Kmart. It gapped up from $40.50 to $45, then continued to $49. It's presently at about $47.50 , but I could see it drop back to the mid 30's if the market tanks - or maybe even if it doesn't.
jegan
be careful in very near term
chart is solid and retailers were strong this morn even as market fell off cliff
its holding its 50 day
agree on the thesis, but probably easier fare and these are exactly the type of stocks to bounce on hope.
TM.. Yep! You're right. But, I'd be waiting for a Daily StochD/StochK cross with a very tight stop.. (Although I did like your two suggestions.) I suspect that retailers will drop after our new President makes office and the euphoria wears off. He doesn't seem to be one to sugar-coat our problems. I sincerely believe SHLD to be a very bad stock hidden under some fancy financial footwork.
jegan
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