Not So Brave Bulls

The bulls, who came into 2010 thumping their chests are in need of diapers. Normally, I would be very comfortable relieving them of their positions after three nasty days in a row. However,  the media has a bearish story for the weekend that is easily understood by the public. OBAMA WANTS TO KILL BIG BANKS.

The public has been on a buying orgy so they have some merchandise to sell. We could see that selling on Monday but that would make the odds of a rally on Tuesday extremely high. I am long, nervous and ready to add late Monday if necessary.

I actually thought I was going to have  a peaceful weekend after covering my shorts yesterday. Some things never change. Have a great weekend.


PJ said...

Heh. The bulls may not be babies, they may just be broke. They put all their money in the stock market, and now have to be spectators or sellers.

Going long is a plausible play - for a day. It's not my style to trade moves I expect to be less than 5% in magnitude, so I only lightened my shorts slightly. But it's hard to believe we will pass through 1090 without a bounce.

Anonymous said...

I's right again.

I told you support at 1091. You all said 1115 fill the gap!!

I also said earlier today this market would sell into the close...booyah!!!!!

So what now you ask? Easy we either rally or go to 1040's we shall see.

Anonymous said...

And Ol Dawg I think UYM will pay you a better return than EDC.

good luck.

Anonymous said...

Cramer spewing more crap.

Cramer called the new-found political risk "huge," saying that if either Federal Reserve Chairman Ben Bernanke or Treasury Secretary Tim Geithner lose their posts, the markets will be in for a "serious correction" of at least 1,000 points or more. Cramer said investors simply can't wade back into stocks until Bernanke has once again been confirmed as Fed chairman.

I agree it would impact the market but no where near a 1000 point drop. This guy and all the fast money crew are all wrong way more than they are right. They should be banned from tv.

praguer said...

I closed my short and took a conservative long position at the end of the day on Friday. When I found that you had too, I considered it a sign that I was learning from you.
In addition to 3 big up days in a row and fear returning to the market, there are 2 other strong arguments for not being short on Monday. First, it seems that 80% of all gains in this rally have come on the first trading day of the week. Second, the SPY is on the bottom rail of its trend line and the DX is at its top rail. They would probably have to break for the market to fall.

Tsachy Mishal said...

Thanks for the compliment. I hope it works out for us.

PJ said...

praguer - Based on anon's comment above, you've got the Cramer indicator on your side too.

Anonymous said...

Anon, I looked at UYM and FAS.

I thought comparatively EDC had sustained the most wreckage.

It's also an emerging market ETF.

Right now, many emerging mkts took a 10%+ hit from their recent highs versus 5% on the SPX.

These markets are ripe for a bouncing IMO.

I just hope that this bottom holds man.


Anonymous said...

Fair enough Dawg. Just keep your finger on the trigger. These ETF's can move very fast. And since I still believe we are heading lower, after a quick move up(maybe to 1020 then lower) EDC and UYM can move fast.

Just my opinion but I think we might be heading to 885 or so on the S&P.
Thats what I see looking at a chart.

But who knows.

Good luck. make the trades quick ones.

Anonymous said...

I'm with you Anon.. although it's possible that we can retest the highs I just don't see it happening. Last week really fucked the bulls up. People are going to second guess themselves before they start getting long now. I'm gonna start unloading at 1120 and then look to buy EDZ when it goes under 5. I agree that by the spring mkt could be at 900.

Anonymous said...

Of course I meant 3 big down days, but they looked up because I was short. Sorry.
Bullish Mondays are no accident. If roughly 100% of gains are determined after hours, it suggests that the major players are manipulating prices when trading is very thin. What better day then Monday to set the tone for the week? I went into last week short and I won't make that mistake again.

pj - I suspect that following Cramer will soon be the contrarian position.

Anonymous said...

Just checked the pre-market and the SPY is up about 1% while world markets are down 1% almost across the board.

Bullish Mondays/pre-market manipulation?Am I a paranoid conspiracy theorist? What do you think?

Praguer (can't remember his password).

PJ said...

Praguer - US was down 2.5% Friday with the world down much less, so Asia down 1%, Europe flat means we have a 1-1.5% bounce to get back even with them. No need for conspiracy theory today.

Anonymous said...

pj - your argument for today is rock-solid. What do you think about the previous 9 months?

PJ said...

Anon - Last 9 months? Fed leveraged up, borrowed $1.5 trn of risk-free assets to go into $1.5 trn of high-risk long-term assets, this bid up risk assets ... Government spending stimulated aggregate demand, but it's a one-time thing ... banks were bailed out and the risk of short-term failures disappeared ... similar actions were taken in China, UK, Japan, and other markets ... market was oversold ... So we had a huge bounce.

But it's a bear market rally ... Once the Fed's bid is gone, risk assets will be on their own ... stimulus was only a delay in the economic reckoning, not a cure ... market is now overbought ... 2010 could be one of the great bear markets ... I think we re-test the March low by year-end.