Tag Archives: Stock Market

First Ballots Are in on Results of Fed Tightening

By Michael Ashton

First Ballots are in on Results of Fed Tightening [as the market votes]

It fascinates me how bear markets all feel alike in some ways. What I remember very clearly from the equity bear markets of 2000-2002 and 2007-2009 is that bulls wanted to bottom-tick the market at every imagined opportunity. Every “support level,” for the first half of each decline at least, saw bulls pile in as if the train were about to leave the station without them on it. Of course, the train was about to leave the station, but it was backing up.

Today, the S&P didn’t quite touch 1810 on the downside, basically matching the 1812 low from January. Bulls love double-bottoms. Of course, many of those turn out not to be double-bottoms after all, but the ones that are look very nice on the charts. So stocks rocketed off the lows, rising 25 S&P points in a matter of minutes after briefly being down 51. The rally was helped ostensibly by comments from the UAE oil minister, who claimed OPEC is ready to cooperate on a production cut. But that isn’t really why stocks rallied so dramatically; after all the news only pushed crude oil itself up about a buck. The real reason is that bulls are crazy maniacs.

Continue reading First Ballots Are in on Results of Fed Tightening

Flattened Out

By Biiwii

The Stock market is at do or die support

[edit] I just realized that if this chart were in text form instead of graphical form it would say “okay Janet, here I sit… so what was it you were planning on saying tomorrow?  Hmmm?”

With the S&P 500 right at do-or-die support per this chart (absolutely critical, but not particularly strong support), I have done more flattening out after yesterday’s post noting a short cover of GS and a sale of TLT, each very profitable positions.  I just don’t think it’s a market to be caught gazing at your successes in, unless you want to get your eyeballs ripped out.

s&p 500 weekly chart

So shorts on the Pigs (KBE) and the Emerging Markets (via EEV) were also covered today, leaving two moderate and un-leveraged short positions open.

As for the gold sector, I have gotten too many emails from people getting nervous about whether or not to pile in.  ‘No, please have patience on taking new positions, the sector is over bought’ was the gist of my replies.  We covered the sector extensively in an NFTRH update last night.  I took some profits there and hedged the rest.

Cash is my favorite thing right at the moment, after noting in NFTRH 381 that I considered my own cash position to be too low.  Now I am more comfy.

We also covered the stock market and a bit more on gold in an update today.  We talked about remaining calm, patient and realizing that 2016 is going to be a year filled with opportunity both long and short across multiple markets.  There will also be opportunities to preserve gains along the way, and that is what this week is shaping up to be.

As for the chart above, that is one ugly mess and it must not make and hold a lower low to January; and that is exactly the point.

The Scariest Stock Market Chart in the World

By Biiwii

As posted at NFTRH.com

Short-term volatility implies anything can happen; long-term the implication of this chart is very bearish unless bond market dynamics are err, addressed

The title is a paraphrase of “the scariest gold chart in the world” (target below $400) someone sent me in 2009, just before the gold price began its $900 per ounce upward journey. So that’s the contrarian caveat and indeed, I hesitate to write bearish things at a time when small speculators are way too short the market and everybody already seems to know how bearish things are.

But the chart is the chart and without further ado, meet the scariest US stock market chart in the world. I was ready to try a long on the SPY yesterday, but decided to wait because of this (being posted here because it never made it into NFTRH 381’s already bloated 42 pages) chart and some others in the face of which I just could not rationalize a bullish stance. Capital preservation is job 1 now, not bullish speculation. I’ll let the bulls prove something first.

Continue reading The Scariest Stock Market Chart in the World

Macro Changes

By Biiwii

As posted at NFTRH

The following is the opening segment of this week’s edition of Notes From the Rabbit Hole, NFTRH 381…

A picture is worth 4-plus years and thousands of words, and the picture below has a lot to say. I’ll say some words as well, since I have kept them bottled up for years in an effort to make sure we operate with discipline as opposed to gold bug style emotion.

The bear market and subsequent inflation-fueled credit bubble early last decade was when I first started paying close attention to macro markets (as opposed to stock trading, which I had done for a few years prior) and how they operate. Having seen well paid professionals lose half of my IRA in 2002, I took over all of our finances and never looked back. But I needed to understand how markets worked and that has been a challenging and rewarding endeavor, not to mention an ongoing learning experience.

I use talky charts like the one below because I need to be talked to, or coached. But I need this coaching to be 100% honest and accurate, not the ranting of some biased lunatic who would have me buy in to his world view. The chart below honestly shows exactly what gold did vs. the S&P 500 during the 2007-2009 US crisis, the Euro crisis and subsequently, the aftermath of unprecedented policy interference in financial markets.

Continue reading Macro Changes

The disappointed

By Tim Knight

Stock indexes should be permitted to do precisely what interest rates are doing these days: go into negative territory

I confess that I was worried this morning. I had 120 short positions, 0 longs, and the intraday ES looked absolutely bullish. I’ve tinted the pattern below, and it looked like a very painful day ahead. However, as you certainly know by now, the rally-that-was-to-be fell to pieces immediately, and my profits are again soaring.

0203-es, stock market

Given the torture I endured for years with these bullish turds, the amount of sympathy I have for such disappointments is simply too low to be measured, even with the most modern scientific instruments. As far as I’m concerned, the stock indexes should be permitted to do precisely what interest rates are doing these days: go into negative territory.

The bulls? Screw ’em all.

[biiwii comment: easy Tim, they ain’t dead yet]

Europe: Why it’s Going to Get a Lot Worse

By Elliott Wave International

(Interview) Europe: Why It’s Going to Get a Lot Worse Before It Gets Better

New interview with our European markets expert Brian Whitmer, the editor of our monthly European Financial Forecast, explains what indicators helped him anticipate market volatility.

You’ll also learn what he’s expecting for the year ahead in European stocks.

You can read Brian’s commentary comparing Germany to the Greek god Atlas as part of our report, Deflation and the Devaluation Derby.

Here’s what you will learn:

  • How Europe’s biggest economies are screeching to a halt
  • Currency devaluation’s role in the developing global crisis
  • How the self-reinforcing aspect of deflation is already apparent in commodities trading
  • Why the top 1% of earners are in for a rude awakening
  • The hair-raising future for U.S. stocks

Just recall how swiftly the 2007-2009 financial crisis unfolded. We anticipate that the next global financial crisis could be even more sudden and severe.

Prepare now with our new report, Deflation and the Devaluation Derby.

CLICK TO CONTINUE READING >>


This article was syndicated by Elliott Wave International and was originally published under the headline (Interview, 4:32 min.) Europe: Why It’s Going to Get a Lot Worse Before It Gets Better. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Words of Wisdom From an NFTRH Subscriber

By Biiwii

One of the great side benefits I receive from writing a financial market report that attracts thoughtful people (professional and private investors alike) is that I gain the benefit of their thoughts from time to time.  This email from Michael S. came in response to NFTRH 380 and some of my comments therein.  His thoughts are reproduced (with permission) for the benefit of anyone reading, and were of benefit to me as well.  Personally, I am trying to be more nimble in trading and have kept cash and risk ‘off’ liquidity vehicles (Treasury bonds) above 90% in this bear phase and indeed usually did so in the year-long momentum loss phase in the stock market, which eventually resolved into this bear phase.

Hi Gary,

I enjoy reading your reports. You lamented not making as much on Google due to being shaken out of Amazon [biiwii edit: I took a profit on AMZN, but was shaken out of GOOGL due to AMZN results]. It happens.

One thing that resonates when reading your report is your conservatism. The fact is many try(most fail) in making money during markets that are in transition now. The key is to do LESS; be patient, preserve capital and don’t try to force trades. It is extremely difficult to show profits in a market that is heading down when liquidity to BUY is drying up. One has to choose between being SHORT…which most don’t know how to do successfully or have the capital to sustain down periods, or, alternatively, remain in cash. The best way I have learned to beat the market is to cut back on trading during down periods, keep position sizes smaller, watch more, do less and let the market tell you where it’s headed. In this market, one should be trying to preserve capital, not trying to beat the market. The small investor has a huge advantage over institutions and large capital because their buys and sells as indistinguishable…big institutions leave their footprints everywhere in volume.

Personally, I look for quick entry and exit points. I don’t hold onto positions for long, and I have learned that BUY and HOLD died back in 2000. This market is extremely dangerous and personally, you can make a lot of money simply by not LOSING money. This is a relative performance game, but it is highly effective over the long term. PRESERVE CAPITAL! That message has never been communicated to investors by anyone I have read and I believe the downfall of most investors is they fail to recognize when the market has changed character and fail to [adapt] to the change by changing their trading/investing style. The key is to limit losses, take advantages of temporary misplacing in the market, but in any case unless and until the market shows it has stabilized and a trend emerges there is no point in risking capital against professionals. You can’t beat the market and the best things is to try to align yourself with it ONLY after it tells you what to do. Most investors are gamblers at heart and simply give up profits earned over time because they believe they always have to play. This is a time to stay on the sidelines, walk away or wait for a large drop, after which most of the selling has already happened. When that happens, most investors won’t return because they have lost confidence, but someone was buying when prices dropped. The hardest thing to do is buy when everyone is panicking. But even though you got out of your SPY last week, shaken out…fundamentally, you got it right. But buying and holding…now that’s the hardest thing. I bought deep on Jan 21, sold a couple days later, and though I wanted to go back in to buy, I didn’t. It happens!

Note: I’m up about 2% YTD, was up 22% last year. I don’t buy and hold. That game is all about being brainwashed by marketers. But if you never sell, then how can you make money?

Thank you for your excellent reports.

MKSI Whipsaw

By Biiwii

In the original post I gave two legitimate reasons I was short MKSI (semi equipment sector fundamentals and an un-actualized technical topping pattern) and one illegitimate reason (I don’t like the company or the guy running it).  Owing to reason number 3, I was dismayed as the market reacted very bullishly out of the gate.  I held it short, with the thought ‘eff you, I’m gonna let it settle out’.  I am biased slightly more long than short at the moment, after all.  No pressure.

mksi 1 minute chart

[edit] Not a bad day at all.  Longs went up and at least one out my 3 shorts went down.

mksi

Odds & Ends

By Biiwii

In this post I stated that I am short MKSI and also the reasons why.  Well, earnings came out and they beat by .07 and are guiding flat.  We’ll see what the morning brings, but I had hoped for results that were worse, obviously.  They also noted a little bump in the sector at the very end of the year, which rhymes with a post at NFTRH.com this morning highlighting the little bump in Semi Equipment orders in December.  If the market likes MKSI’s results, then consider me wrong.  Not the first time.

On other matters, I am a bear with the intermediate trend and yet I have been nursing this counter trend bounce scenario, still holding a chunk of SPY and even adding to GOOGL today.  I am no sponsor of the bull case, but it looks like the internets at least are staying on message with Alphabet and Amazon up I guess on Facebook’s results.  So the ‘DJINET bounce from support’ scenario is still alive and well.