Tuesday 24 July 2012

Is The Dream Over?

Is the dream over? The Apple of the eye missed! The world must be coming to an end! So what next?
At this point of writing, ES futures are down about 6-7 handles. Not that bad considering almost all the hedge funds are loaded with Apple to the gill. QQQ fell below $ 62 and is trying to recover. But Apple is down 5% after hours.  It will now fall for much of August and below $ 500 is not unimaginable. I had this discussion with one of our dear reader in the not so distant past when I wrote that Apple is looking ripe for a fall. You can possibly find it in comment section in one of the older posts.

Readers know that I am leaning bearish. As a bear, when I see that everyone around is agreeing with me, it scares the day light out of me. If everyone agrees and everyone is right, it would be so easy to make money in stock market. Alas, it is never that easy.

Today I closed my short position because I would not be able to monitor it regularly, may be a little too early and left some profits on the table, but hey, no regrets.  The big game is still on and I will be there. For now I think a bounce is brewing, which will kill few bears and trap few more bulls.

The day started like I wrote yesterday. Tested the lows of yesterday and broke below. But when the BTFD crown came, they found that the drinking bowl is missing today. Just like I said yesterday but I did not expect it to happen so soon.  I was expecting a bounce and WSJ hack did float the rumour before the close. Only Apple spoiled the party. But we may still get a bounce just to squeeze the shorts. Need to wait few days before loading on the short side again. As my regular readers know, my target is 1200-1220 in SPX.  I remember someone asking me couple of days back whether I still believe in my target! Someone (Anonymous) also called me crazy because I had taken position in FAZ and TZA and other leveraged shorts. There you go.

However, for now when everyone has jumped on to the bear side, I would like to step back and wait for a while. I do not trust these bots and dark pools. Moreover, FX has not dropped along with Apple. Euro is still above 1.2062 and AUD has not broken 1.02 yet. They will break down very soon, but for now, the slide has halted.  Short term, the indexes are over sold. This week 173 firms representing 37% of S&P will have their ER. So caution is warranted.

By the way, I read somewhere that GS is calling for a bottom of the housing market. You know the drill. It is now confirmed that housing has much more to fall.

Last thought for the day, I sent out tweet yesterday that bad things are going to happen. If you have missed it, here is the link again. Hendry: ‘Bad Things are Going to Happen’ - US Business News - CNBC

From tomorrow I may not be able to do regular post for couple of weeks. But I will definitely try to scribble few lines if something interesting happens. Thanks for reading http://bbfinance.blogspot.com/ . Please join me in Twitter (@BBFinanceblog) and do re-tweet, post it on wall and share with your friends and circle.


  1. BB, you were right... (also with aapl as I painfully must admit) - have a good trip & thanks!

  2. Thanks BB. Asian market is preparing to trap the bear

  3. Thanks BB. always on point. enjoy your time off :)

  4. Hi BB, If you can please do a short weekend post it will be great, so as to know your next move.
    As always, you rock!!

    1. I will definitely post tomorrow. Thanks Raghu.
      I don't think much will happen today.

    2. Hi, BB, when are you looking to load up the shorts again? safer after the Fed meeting next week?

  5. Hi, BB, now I understand why you said we have to be very careful being shorts because how the market can be manipulated by those people in power. Do you still see this as the last bounce and the target of 1200 being reached soon?