Monday 21 May 2012

Surprise, We Have A Bounce!

So we have a bounce after six or seven down days. Already talking heads in 24 hour news channels have started identifying the next buy! How come there is always a time to buy but never a time to sell? No wonder that most of the time news is just noise.

What happens next? Problems in Europe gets solved? Will Hallande start doling out money to all Europeans?  Or ECB starts its printing press? If none of the above, then why are the talking heads so excited today?

I closed the short positions and was waiting for a bounce even while the world was ending last week. But today I am reminding myself that one swallow does not make a summer. I need to see how things are over night and tomorrow. I am ready for a quick but vicious bounce and would like to take advantage of it. This is just a technical bounce which will also kill most of the shorts.  Let me remind you how the tape was played last year.

This is S&P 400 Mid-Cap ETF, RFG. To me it looks so very similar. At the same time, I want to be sure about the strength of the bounce. So I will give it some more time. Tomorrow might be a red day and a better entry point. There is no hurry. This is not the last train leaving station.

Now that the Fadebook drama is over, folks seem to be in a hurry to get out of the stock. My time line for Fadebook penny stock was May of 2014. But at this rate, it may come in 2012 itself. The best description of this scam is from NY post.

So we wait for clarity and best odds. In the mean time, please re-tweet this post to someone who might like it and follow me in Twitter @ BBFinanceblog. Thank you for reading


  1. Thanks for the post. I feel like some catalyst is sure missing in this correction so far and all along move down from 1412 was more staircase than impulsive, of course no shock wave. I am afraid it is going to be like another Mar2011 - May 2011 move to make another higher high in 1500 area with A-B-C move (1440 - 1400 - 1550)!!! The VERY obvious areas to short on several stocks/market index concerns me :)

    - Prasad

  2. BB, I also found a good correlation with USO. Last year tape, USO sold off very nicely towards the end of April and early may. It bounced and stay in uptrend until about mid July or after 4th July. We could see bounce in crude oil soon here.