I am 100% short despite the slight breakthrough above the 11,782 level. I'll have to see a stronger move above to exit this position as there are too many indicators flashing bright red warning signals.
--Fred
Showing posts with label djia. Show all posts
Showing posts with label djia. Show all posts
Monday, January 17, 2011
Wednesday, January 12, 2011
The Top or Just a Stop?
The time is here to tell whether or not the DJIA will hold at 11,782 or take off for higher levels.
I added to my short position - SDS - today and will add more if the market falls from here and will sell half if the stock market looks like it's going to close higher tomorrow. I'll also be looking to take a position in VXX if the fall looks to be at all violent.
The extreme bullish sentiment and possibility that we may close above 11,782 and then turn south will keep me from taking a long position.
The market knows....
--Fred
I added to my short position - SDS - today and will add more if the market falls from here and will sell half if the stock market looks like it's going to close higher tomorrow. I'll also be looking to take a position in VXX if the fall looks to be at all violent.
The extreme bullish sentiment and possibility that we may close above 11,782 and then turn south will keep me from taking a long position.
The market knows....
--Fred
Monday, December 27, 2010
December 27 2010 Stock Market Update
I realized that I had failed to post that I had closed out my short position from mid-December with a small loss. Did that about a week ago but with the extreme sentiment readings once again elevated I have again taken a short position.
This is the perfect bear market setup: bulls are now investing their egoes in a climbing stock market and will likely buy into any dips for some time. We will know the market is ready to bounce a bit when they become angry and start blaming shorts for bringing the market down, which means they have finally exited their positions.
I consider a possibilty of the bull run extending from here but it will take a clear breakout above 11,782 for me to get behind that. Remember, I called the upside out of the March 2009 lows at 11,000 as early as April of that year. If that call was more than just luck the secular bear market should kick back in to the downside and begin to frustrate the bulls just as the past 20 months has frustrated the bears.
This is what secular bear markets do.
--Fred
This is the perfect bear market setup: bulls are now investing their egoes in a climbing stock market and will likely buy into any dips for some time. We will know the market is ready to bounce a bit when they become angry and start blaming shorts for bringing the market down, which means they have finally exited their positions.
I consider a possibilty of the bull run extending from here but it will take a clear breakout above 11,782 for me to get behind that. Remember, I called the upside out of the March 2009 lows at 11,000 as early as April of that year. If that call was more than just luck the secular bear market should kick back in to the downside and begin to frustrate the bulls just as the past 20 months has frustrated the bears.
This is what secular bear markets do.
--Fred
Thursday, December 23, 2010
Patience...
Once again I remind myself that patience is a virtue. The financial community is talking themselves into a higher market but only the market will tell us if that will happen.
I predict that the market will fail to break through the important 11,782 level, to any great extent, and will then proceed to eat away at bullish sentiment over the course of 2011 with completely unexpected action that will keep people hopeful and in the market, waiting for the next big up move. The rally out of the March 2009 lows was just a big setup that will be the cause of much more wealth destroyed than created. That's what secular bear markets do.
Should the stock market break through I will certainly revise my outlook. For now it continues to eat away at the confidence of bears and only those who fully understand history, what a secular bear market is, and how massive this one is, will be able to profit.
--Fred
I predict that the market will fail to break through the important 11,782 level, to any great extent, and will then proceed to eat away at bullish sentiment over the course of 2011 with completely unexpected action that will keep people hopeful and in the market, waiting for the next big up move. The rally out of the March 2009 lows was just a big setup that will be the cause of much more wealth destroyed than created. That's what secular bear markets do.
Should the stock market break through I will certainly revise my outlook. For now it continues to eat away at the confidence of bears and only those who fully understand history, what a secular bear market is, and how massive this one is, will be able to profit.
--Fred
Wednesday, December 15, 2010
Inflection Point Opportunity
AT this point we are approaching a point of what I consider extreme resistance but with little support and I have taken a short position via SDS.
The resistance comes from the August 2008 high of 11,782 on the DJIA. All gaps have been closed at this point and market sentiment is at extreme levels so the opportunity here is great. A close above the 11,782 level would almost certainly cause me to cover this position.
--Fred
The resistance comes from the August 2008 high of 11,782 on the DJIA. All gaps have been closed at this point and market sentiment is at extreme levels so the opportunity here is great. A close above the 11,782 level would almost certainly cause me to cover this position.
--Fred
Friday, November 26, 2010
Bought SDS
I took about a 35% stake in SDS just before the close today. While I had expected an up market today and possibly Monday this market simply appears too weak to rally. I expect to be in at a 100% level soon as I expect the next 2 weeks to see the stock market drop well under the 11,000 level.
--Fred
--Fred
Wednesday, November 24, 2010
Waiting...
It is looking like Friday or even Monday will provide the strike I've been waiting for as the stock market seems to have set up this little counter trend rally perfectly.
I expect sentiment to rise once again with the holiday cheer and stock market bounce and we will then have a perfect two week window in which to pull off the real counter trend retreat back below 11,000 on the Dow.
Whatever position I take I will likely keep a fairly tight stop on it; more on that when the trade is actually made.
--Fred
I expect sentiment to rise once again with the holiday cheer and stock market bounce and we will then have a perfect two week window in which to pull off the real counter trend retreat back below 11,000 on the Dow.
Whatever position I take I will likely keep a fairly tight stop on it; more on that when the trade is actually made.
--Fred
Friday, November 19, 2010
Staying Focused & Solvent
At this time I am out of the stock market and simply waiting...
I believe that to become a good stock trader one must hone their skills just as an athlete or salesman would. One of the most important traits on the road to success is being focused and when dealing with the stock market it is easy to become distracted by those who truly believe in a particular stance and those who simply have been trained to keep you bullish on whatever they are selling.
A year and a half ago I stated several times publicly that I believed the stock market would likely "close the gap" up to the July 2008 lows around 11,000 on the Dow. At the same time I continued to trade with a bearish bias; why did I do so? There are a number of reasons but the main one is that I knew that our troubles are long-term and when someone would state a bullish stance I felt the need to correct them...BIG MISTAKE because this got my ego involved and got me distracted from the trade.
Another reason is that I listened to too many smart people who make a living out of voicing their opinions. I don't mean Jim Cramer, I mean Richard Rusell and Gene Inger, both people I respect but I have found out that neither are good for me as a trader because they are selling a service and that service really has little to do with stock trading.
To make a long story short I now make every effort to look at the stock market with total objectivity and I always keep in mind that, "the market can remain irrational longer than I can remain solvent."
--Fred
I believe that to become a good stock trader one must hone their skills just as an athlete or salesman would. One of the most important traits on the road to success is being focused and when dealing with the stock market it is easy to become distracted by those who truly believe in a particular stance and those who simply have been trained to keep you bullish on whatever they are selling.
A year and a half ago I stated several times publicly that I believed the stock market would likely "close the gap" up to the July 2008 lows around 11,000 on the Dow. At the same time I continued to trade with a bearish bias; why did I do so? There are a number of reasons but the main one is that I knew that our troubles are long-term and when someone would state a bullish stance I felt the need to correct them...BIG MISTAKE because this got my ego involved and got me distracted from the trade.
Another reason is that I listened to too many smart people who make a living out of voicing their opinions. I don't mean Jim Cramer, I mean Richard Rusell and Gene Inger, both people I respect but I have found out that neither are good for me as a trader because they are selling a service and that service really has little to do with stock trading.
To make a long story short I now make every effort to look at the stock market with total objectivity and I always keep in mind that, "the market can remain irrational longer than I can remain solvent."
--Fred
Wednesday, November 17, 2010
Neutral on Market Short Term - Exited SDS Position
The Investor's Intelligence newsletter today painted a very bearish picture as bullish sentiment has risen to heights not seen since early May, two weeks after the market top. The balance to that is a very bullish short term picture painted by the Quantifiable Edges newsletter and the seasonal affect heading into the Thanksgiving holiday.
This morning I exited my short position with a small gain with the intention of reevaluating prior to Thanksgiving or the following Monday. I believe the stock market is likely to struggle off these levels and stage a rally for the next week, but regardless, I plan on letting the stock market clarify it's position before I take another position.
--Fred
This morning I exited my short position with a small gain with the intention of reevaluating prior to Thanksgiving or the following Monday. I believe the stock market is likely to struggle off these levels and stage a rally for the next week, but regardless, I plan on letting the stock market clarify it's position before I take another position.
--Fred
Tuesday, November 16, 2010
Added To Short Position
I've added to my short position at the 11,000 level on the DJIA. The stock market toyed with that level much of the day but showed little ability to bounce and the trend remains down until it doesn't. Therefore I have increased my SDS position to 100% with no stop but I will likely sell all on a strong open tomorrow morning. A weak gap up will not impress me; I will need to see a strong, across the board rally to exit this position.
--Fred
--Fred
Monday, November 15, 2010
NY Fed Manufacturing Index Takes a Dive
http://globaleconomicanalysis.blogspot.com/2010/11/ny-fed-manufacturing-survey-new-orders.html
The above report on the NY Fed Manufacturing Report came to me from Mish's blog, always an excellent source of information.
But how does this factor in to the trade? For a long time now it seems that the stock market has been levitating way above where it should be. Yes, I expected the DJIA to reach the 11,000 level before resuming the secular bear market and it did so right on cue, but since August of this year the stock market has been on a tear that made little sense, except, of course, for the affect of Quantitative Easing.
But now that that has been front ran and all the little guys have been suckered in it seems like all the dominoes are lined up perfectly and even the slowdown warned about by Consumer Metrics seems to be finally showing up in the official economic numbers.
LOOK OUT BELOW!
--Fred
The above report on the NY Fed Manufacturing Report came to me from Mish's blog, always an excellent source of information.
But how does this factor in to the trade? For a long time now it seems that the stock market has been levitating way above where it should be. Yes, I expected the DJIA to reach the 11,000 level before resuming the secular bear market and it did so right on cue, but since August of this year the stock market has been on a tear that made little sense, except, of course, for the affect of Quantitative Easing.
But now that that has been front ran and all the little guys have been suckered in it seems like all the dominoes are lined up perfectly and even the slowdown warned about by Consumer Metrics seems to be finally showing up in the official economic numbers.
LOOK OUT BELOW!
--Fred
Friday, November 12, 2010
Stock Market Trading: Short Via SDS
I've decided to start fresh on this blog now that I've moved from my hosted site to blogger.com.
Today I took a 50% short position in SDS at $26.40 with a stop loss order at $26.20.
Reasons: Extreme bullish sentiment according to Investors Intelligence and AAII; entering the weekend with a potential panic developing over the European debt issue and currencies wars; over extended stock market; longer term bearish expectations in the macro economy based on Consumer Metrics Institute data.
Adjusted stop loss to $26.45 at 11:26 PST.
--Fred
Today I took a 50% short position in SDS at $26.40 with a stop loss order at $26.20.
Reasons: Extreme bullish sentiment according to Investors Intelligence and AAII; entering the weekend with a potential panic developing over the European debt issue and currencies wars; over extended stock market; longer term bearish expectations in the macro economy based on Consumer Metrics Institute data.
Adjusted stop loss to $26.45 at 11:26 PST.
--Fred
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