Are you trying to figure out why the stock market jumped the way it did today? Was there an expectation of stronger economy, higher yield, problems in Euroland solved or Obama managed to create employment for everyone in America? Only worthwhile news I can think of is that Italy was downgraded last night. But look no further, we are here:
And that is why the bounce.
I did call for a bounce yesterday and said that it will be an opportunity to short at a higher level.
I expect Monday to be small range bound may be tiny red and Tuesday another jump up. Then hopefully game over.
You may ask why did I go short before? For one, we can never exactly time the market. And secondly, that is why we are only half invested and going short in stages.
I took off the most volatile part yesterday and am happy to keep the rest in.
Amongst all the noise and euphoria, Apple was definitely weak today with a jump of only 1%.
By the way, do you remember that bear market correction starts on good news, not on bad news. So by next Tuesday, you will see all the talking heads saying how nice and blue the sky is!
The above tape will be played out in the next few days and I can hardly wait with all the excitement.
Before we go for the weekend party, I have this write up on the investment philosophy by George Soros:
http://www.marketfolly.com/2012/07/george-soros-best-investment-advice.html
Take your time to read it.
So have a great weekend folks. Rest the brain. We will need it functioning well next week.
I did call for a bounce yesterday and said that it will be an opportunity to short at a higher level.
I expect Monday to be small range bound may be tiny red and Tuesday another jump up. Then hopefully game over.
You may ask why did I go short before? For one, we can never exactly time the market. And secondly, that is why we are only half invested and going short in stages.
I took off the most volatile part yesterday and am happy to keep the rest in.
Amongst all the noise and euphoria, Apple was definitely weak today with a jump of only 1%.
By the way, do you remember that bear market correction starts on good news, not on bad news. So by next Tuesday, you will see all the talking heads saying how nice and blue the sky is!
The above tape will be played out in the next few days and I can hardly wait with all the excitement.
Before we go for the weekend party, I have this write up on the investment philosophy by George Soros:
http://www.marketfolly.com/2012/07/george-soros-best-investment-advice.html
Take your time to read it.
So have a great weekend folks. Rest the brain. We will need it functioning well next week.
Thanks for the post! Where in the charts/BB's can see a move to 1200? Just trying to learn! Love the blog
ReplyDeleteYou can not see a future move in a chart.Its interpretation of many things.
DeleteDo you see the 1375 area being tested again or may even go a bit higher? Thanks!
ReplyDeleteWe are at 1356. So 1375 is not an impossible target. But what does it matter whether spx reaches 1375 or 1380. I will re-enter short position on Tuesday and I am hoping SPX reaches as high as possible by then.
DeleteI like your blog. Please emphasize that your portfolio is very risky (inverse funds at 3x's)!!!. You talk caution ----but come on
ReplyDelete----4 suggested 3x's inverse funds? Wow---that is not caution that is insane!!!! You are either over confident or trade in and out more than your tweets suggest!!!
You may not be following my Blog for a long time. I have not traded anything for over a month. I trade only when I see a possible risk to reward ratio. And I am not suggesting any trade to anybody. These are my model and everyone has to trade invest according to his/her own risk tolerance level. Possibly you do not understand how a bear market correction works, which is mostly "fast and furious". I advise everyone to have their own stop loss level and I have mine. We will re-visit this issue by the 1st week of August. It will be helpful if you give your real name.
Deletesee--you say re enters shorts ---did you sell your inverse positions Friday?
ReplyDeleteDid you not read my post of yesterday? I sold out the UVXY.
DeleteBb thanks for the posts. I am a long time reader and have found you to be transparent with all of your moves.
ReplyDeleteThanks Mike.
DeleteMost have very superficial idea about trading. A bear correction is normally complete in few weeks and if we are sure of the move, we can play with leveraged ETFS. It is much safer than options.If I am lucky, I can even sell covered calls and reduce my cost. But I do not hold leveraged ETFs long enough to sell covered calls. One should never hold leveraged ETF for a longer period because of daily re balancing.
But I am not advising anyone to take these trades. It is there just for general direction of the market.People read what they want to read.
Hi,
ReplyDeleteEnjoyed your post. BB is presenting to congress on Tuesday and I would have thought based on what he said re QE3 would set the tone for the market for the next few days but you think the market will go upon Tuesday and then go down?
Is this based on an analogue you are following, Hurst cycles or some other reasoning? Appreciate your clarification. Thanks.
Amit
The above chart is not an Analog and I strongly suggest nobody should follow any Analog. Analogs are just for fun and fluke. Its nice till the time they match but have very little guarantee of repeating that in future.
DeleteI have my own cycle analysis and few other TA indicators which I follow. Let not worry about the mechanics but see the end result. So lets wait for one more push up till Tuesday and then wait and see if my call for market correction by 1st week of August comes through.