You can call it waste of a day or choppy trading. But the Boyz have to hold the market up at least for the first few days of new month, till all asset allocation is complete. I think this hold up game will continue till Monday next. Whatever happens in-between is inconsequential. So nothing much to say either.
The market price action is indicating that 1333 in SPX will be broken and a new top will be in place by March. But to reach the upper price level we need at least a 5% correction in the immediate term. For now, the momentum is waning and everything is over stretched and divergences everywhere. Like an elastic band the market will snap back in position before any upward journey.
Conspiracy theorists have it that the market is being propped up for the Facebook IPO. While it is unlikely the reason, the no volume market is being held up by the powers that be to create the “greed factor”. As always, retail will buy at the top and sell at the bottom. And it takes time to convert non-believers to believers.
Coming back to Facebook, the fate of other social networking companies who have done IPO recently have not been that great. And as a fad, how long they survive is a question mark. Like linkedin or Groupon, the business model is suspect. Just having a huge user base and that too in places like India, does not guarantee any revenue. I would love to short all these companies in June of 2013.
In terms of market technicals, NYMO is still below the trend line which it broke before.
Tomorrow is NFP day. The last NFP day was red and we expected it to be a turning point which did not happen. So I am going to treat it as any other day, may be with higher level of volatility than today. But the situation today remains the same as yesterday. So we just wait for another day. And just before I sign off, let me show you the latest of the analog of Eric Swarts;
That analog is uncanny... I was following May of 2008 but that's gotten messy as an analog.
ReplyDeleteThese market analogy graphs are amazing...!
ReplyDeleteAnalogy is good when it works. But you never know when the relationship breaks down. Just another guide may be.
ReplyDeleteGreetings; first let me mention I like your Nissan ads! Feeling a wee bit of pain with my shorts...this is the tough period...we're close but now thoughts turn to reclaiming capital rather than profit. More than once I have exited once the capital was regained and missed all the profit as the market continued down. Enjoying your posts and reflections of the financial world. Thanks.
ReplyDeleteSteve
Hi,
ReplyDeleteI really like your posts.
There's a guy that just launched a very nice website about forecasting the stock market.
You guys should look at it !
www.stockmarketforecasts.org
Been following your postings diligently since you started blogging and continue doing so cause of your excellent, unbiased analysis & uncannily accurate anticipation of the market's movements.
ReplyDeleteWonder if you have any current thoughts on Gold, Oil, & Apple. I had followed your earlier advice on all these and was happy with the results! Thanks!
Peaks
Been following you diligently since you started blogging and continue doing so cause of your excellent, unbiased analysis & uncannily accurate anticipation of the market's movements.
ReplyDeleteWonder if you have any current thoughts on Gold, Oil, & Apple. I had followed your earlier advice on all these and was happy with the results! Thanks!
Thank you for the post, BB. TexEx
ReplyDeleteYou have been Bearish since Late Dec - Early Jan and the market keeps going up. We are only on day 31 up since Dec 20 buy signal from IBD. WE went up for 118 days from Sept 2010 to Feb 2011, it looks to me we can do the same thing here while everyone keeps calling the top -the top - the top. Sure we will have pullbacks, WE are above the 50MA - BE LONG or get long on a pullback.
ReplyDeletei dont think u should short this market till 9 Feb
ReplyDeleteThanks Guys. I have been dead wrong with this trade. And like Steve, I am also praying for return of capital.Lessons learned. One should never go against the 1st instinct.
ReplyDeleteBy the way, I took the short trade in the 1st week of January, when I thought Santa rally is over.if you remember my post at that time, I was not very keen to short but then greed overtook rational thinking. Now the current pain is the price of greed.
ReplyDeleteHow come you didn't stop out from Jan 1st week short? Weren't they options too? Ouch.. I guess taking losses early is never easy to accept.
ReplyDeleteI suppose it is combination of greed and arrogance. But past success is no guarantee of future. So now pray that pull-back happens before expiry.
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