Not to make light of it. It’s probably a nice move for Google. But the stock is moving on it and in that regard it is hype. So I may decide to sell. Since you don’t pay me to make decisions for you I’ll not publicly make that decision. NFTRH subscribers who may have taken these trades are profitable and they are grown men and women who can make their own decisions as to what profit is acceptable as well.
The target of 590 remains, but I often sell below targets. It’s just how I do it.
Since Mr. Draghi Jawboned the ECB’s coming QE actions we have had Europe on a ‘me too’ QE play to the US (asset price appreciation Über Alles). While I took my marbles and small profit and went home on the European index ETFs, the big picture view of the Euro 50 continues to be a good one after holding lateral support and breaking above key lateral resistance. The downtrend line could be another matter, however (but it’s popping through that too, as of now).
Biotech, a sector who’s bullish upward arc we have been tracking for about a year, is still going up. Here is today’s momo, Amgen (AMGN). I don’t own it and have no plans to, but I thought the chart was pretty cool. There’s the S/T target if the break holds.
Aren’t these the guys (that is, ‘Hedge Funders’) that as an industry were negative in their returns in 2014? In Q4 2014 we began a thesis that would see European stock market out performance (vs. the US) as the Euro is leveraged for asset market appreciation, USA style. Well now some “hedge funder” on CNBC lets the world in on the play…
It is no coincidence that I am now becoming cautious on the European stock play (pending a potential, even likely test of major support we noted in an NFTRH update this morning). Why? Because these guys seem to be a herd like no other. They are called Hedge Funds and people think ‘ooohhh, they must know what they are doing’.
But what they actually seem to do is momo trends and drive them too far, eventually not being smart enough to get out of the way of the fallout.
Listen to this guy. He basically states ‘I am a trend follower’ for viewers of CNBC. If my analysis is correct, he may be right about the longer-term trend but it does nobody any good to get in front of a camera and tell millions about the trend you are following when things (USD, Euro) are at extremes and other things (European stock indexes) are at resistance points.
 ha ha ha… she mentioned Alice in Wonderland. i love it
Now it is the bulls’ turn to prove something. In disclosure, aside from two small gold miners I took a try on into the close I am only long one thing, India and short one thing, S&P 500. The rest is as NFTRH had been advising going into Friday’s kickoff, heavy cash and short-term Treasury equivalents.  plus a couple other things, Thing 1 and Thing 2 that I decided to hold on to. Thing 2 is so small as to be irrelevant. Thing 1 is a Canadian listed gold stock I decided not to take profit on, and instead ride to a paper loss; ah the pleasures of commitment]
I have no real horse in the race other than a non-leveraged short against SPY. With that disclaimer to my stance, it is now a burden upon stock market bulls to prove their case because this market got perversely over bullish and was ripe for a real kick in the pants. The technicals are now breaking down to add to the sentiment case.
So it’s as simple as perma-bulls (the ‘its’ a new secular bull market’ crowd) mustering up some bravado to back up their resolute bullish view. Come guys ‘n girls, buy ‘em up! Get on CNBC and talk in your usual conventional tones and discuss conventional strategies as if this is a conventional market.
Pay no attention to my favorite chart showing a policy-driven wealth effect vehicle utterly dependent upon a certain kind of interest rate policy and unconventional bond-based market manipulation tools.
How long before the next insecure Jawbone hits the mic to firm up the bulls’ backbones?
Don’t interpret this as a bravado fueled chest thumping post. A measured target on a monthly chart can be plotted by a Chimp with a calculator. That said, here is a chart of SPY created shortly after it made the big break to all time highs. Doink… it would be cool if this is the top, but it’s just one down week and the market needed a correction badly. So no reading more into it than that.
I have been seeing the markets as well as I ever have (which is far away from perfectly) coming out of 2014 and into 2015. For some reason charts are working. By that I am talking mostly about daily charts and in many cases daily stock charts.
It may have something to do with the droves of dumb money that have been piling in and forcing individual stocks to act in a more linear fashion (ex: Google paints a nice short-term pattern, tests and finds support and expresses the pattern bullishly as hoped), maybe wresting some of the action away from those erratic black boxes. Dumb money would force that linear action upon downside action as well, as they puke back out.
Patterns have been playing out as expected and beneath the surface I have a weird feeling that some heavy hand has backed off the markets or that the shear noise created by too many algos and too many jawbones has itself been drowned out in favor of more traditional market action. Again, this could be a sign that the public came in big with the latest extreme over bullish sentiment.
I am heavy in cash (per recent NFTRH), short a little (per an admittedly timid NFTRH+ SPY update yesterday) and thoroughly going to enjoy this. Patience, as always, will work well.
The Bio’s continue to look like they have been consolidating as opposed to correcting. Here is the daily chart from an NFTRH update this morning showing the consolidation triangle. Today is making a move on that.
For more perspective and also from the update, here is the monthly chart of BTK leading the NDX (itself a leader) since 2011.
The thing is, every time I’ve thought about getting actively bearish, the Biotech sector has made me stop and think about momentum and dead bears along the road to a market top one day. So instead I trade what is working.
The Biotech sector, as of exactly 12:20 PM US Eastern time on Wednesday, March 4th remains bullish.
GOOGL was an NFTRH+ trade idea on Feb. 17. The target is 590, but I am going to do what I often do and sell below that target. I am not going to be greedy in this market. By “this market” I mean ‘this market with the really lousy sentiment backdrop': Market Sentiment Hideously Over Bullish. Over bullish does not mean ready to correct, but it does mean risk vs. reward is very bad and well, it simply means over bullish.
 I heard myself say “take profits!” so I did on the 2nd half of the TTNP position. No worry though, there’s another one dropping toward my buy point. Reap and re-plant…
The play has been to use the weekly Biotech index as a backbone. As long as it is on this firm trend, the sector is okay.
With the above backbone in place the area I (in temporary Casino Patron mode) have been working is in the more speculative Biotech stocks that had formed basing patterns. This was originally a seasonal (tax loss/Jan. effect) play but now it appears to be morphing into a latter stage sector play as the speculative stuff starts jumping well beyond January. Last week we looked at TTNP, which I de-risked by taking half off the table. Also, profits were taken on CUR and OMED. As these things bounce up and down, some provide buy back opportunities as well.
It was late in Q4 2014 and in accordance with our macro view and in anticipation of the coming ‘tax loss/January effect’ festivities TTNP was among several stocks I picked up. As noted weekly in NFTRH’s portfolio notes it was a “rank chart speculation” bought at support.
Then came subscriber RK’s info that the stock was well regarded by a Biotech analyst who has had way more hits than misses (Mr. BioNap) and I thought hmmm, maybe I’ll not be so hasty to sell it as long as the chart continues to look constructive. Well, the chart has expressed itself as hoped and now I have de-risked the position, taking 1/2 of it off the table for a 32% gain. I’ll watch to see how it shakes out from here.
The baby Biotech stocks and specialty Pharmas are starting to get some bids. Old friend OMED was bought for the same general reason as TTNP, and it was partially de-risked as well. I hold two others and while I agree with some that Biotech is getting silly, it has been one of NFTRH’s best markers on a potential bullish market blow off scenario in maintaining its robotic uptrend by a weekly chart we routinely review. But the idea though, is to TAKE SOME PROFITS, routinely and unemotionally.
Here is what some of the smaller entities have been doing vs. the big guys (like CELG, GILD, etc.) in 2015. This could be signaling a maturing bull market now that the speculative stuff is out performing. DEPO is not really speculative. It is a fundamentally solid company; but it is smaller and more speculative than the giants.