As often noted to NFTRH subscribers, I believe now is a good time for swing trading. Not day trading (whipsaw) and not investment (other than maybe a few items I’d consider investment worthy for my own reasons, largely stemming from my originally coming from the productive economy, not the financialized one).
Swing trading is defined here as the act of taking positions on downside buying opportunities and holding through some ups and down and then forcing myself to take profits when they are presented. In 2015, for some reason they have been presented with great regularity. I am not sure why, other than I did improve my own focus as a trader and decided to stop burning so many commissions.
I bought Intel on its big drop and decided to hold into earnings. That’s often a tough call. Today it’s up in AH after meeting expectations.
Then there are the Biotech/Specialty Pharmas. We have been following the index and the sector ETF, advising that until the trend is broken the trend is not broken.
Still, I decided to take profit on this one again after buying the recent plunge.
I decided to continue holding this one despite today’s 10%+. The chart and some light fundamental study (but it’s a spec. Bio!) kept me holding.
Continue reading A Good Run Continues
By Elliott Wave International
[biiwii comment]: 3 posts, all by guests. Some Mondays I am all talked out after an NFTRH report, and just enjoy decompressing. The weather is great, the market has been good thus far in 2015 and well, it’s a day by day thing. As to EWI’s theme here, it makes no difference to me… bubble, no bubble, bubble growing, bubble popping… the theme continues to be trade what you see, not what your ego or hopes and dreams see… and take profits and manage risk along the way. And for crying out loud stop reading people who micro manage gold in a vacuum as if it’s the only market on earth. They call that agenda.
Tech bubble: Different this time?
Editor’s note: This article is from Elliott Wave International’s brand-new investment report, “U.S. Investors Face a Giant, Historic Bubble.” It originally appeared in the April issue of The Elliott Wave Financial Forecast, published March 27, 2015. For a limited-time, EWI has agreed to give our readers exclusive free access to the full report. Please click here to read it now.
In March, we covered the return to a popular fascination with technology.
The striking resemblance to 2000’s technology mania is not going unnoticed. How can it? With the NASDAQ’s much heralded return to 5000 and magazine covers proclaiming “Google Wants You To Live Forever,” concern about an “asset bubble” is being raised. But this is actually another throwback to early March 2000, when the NASDAQ reached its all-time high and the Financial Forecast remarked on a “public ambivalence toward warnings of any kind.”
Continue reading Tech Bubble: Different This Time?
Market leader #1, the Biotech index is anything but broken as we noted for the oh, 100th time a couple days ago after many drums were beating for an end to BTK’s rally. When it ends it ends, and the trends (esp. by the NFTRH weekly chart and its upward Arc) will instruct on that. Meanwhile, the daily did not even test the channel line, instead it’s bouncing at the 50 day averages.
Market leader #2, the Semiconductor index was suspect under the 50 day averages. Now? Not so much (though in this market, one day popping up or down needs confirmation). SOX is 100% intact above the support level around 650. It’s got some pretty gaudy upside targets by longer-term charts. Above 650, bulls have the benefit of the doubt.
Continue reading 2 Market Leaders
Here is one way to put a happy spin on things. Wall Street is increasingly aware of the deceleration in corporate profits and a potential for the upcoming earnings season to be a rough one. This CNBC article dutifully notes these things, but the highlight is one sun shiny optimist who apparently thinks it may already be baked in.
“Obviously there’s a ton of concern… but my view is that expectations have come down rapidly, and there’s a clear understanding that we’re looking at a real weak environment right now from an earnings perspective,” said David Seaburg, head of equity sales trading with Cowen & Co.
“I think there could be an outside surprise that could carry this market higher, especially given that you have every central bank working to inflate asset prices.”
There you have it, “expectations have come down rapidly”. Surely this optimistic view that the worst may be behind us includes stock market valuations and prices that have adjusted…
Oh wait, never mind. ‘The worst’ never even got started.
So let’s keep it real and simply realize stocks have been bullish, the trends are up and there has been no discounting of decelerating corporate profits in stock prices. The market now decides between manic bubble making (defined here as an irrational separation from fundamentals, cooked up by policy though they have been) or a correction to get in line with said fundamentals.
Again, the theme has been that the US market was not over valued into 2nd half 2014 if one is willing to wear blinders to its dependence upon unconventional monetary policy. But if those fundamentals continue to degrade, the market will look conspicuous even to the densest, most conventional of the herd.
Another Scene From ‘Peak Fed': Dudley Signals ‘Go-Slow’ Approach
You see the humor of it all.
Policy makers’ shear predictability (good cops and bad cops always at the ready, with market events dictating which ones eat the mic at any given time. Or if you prefer the little clown car analogy, they drive to center ring, honk honk honk… and out they spill doing tricks and feats of daring do at every sensitive juncture when the market needs a little relief.
The hyper intense preoccupation the market (a collection of millions of decision makers and black boxes) has for the buttoned down eggheads, and its responses to each and every predictable Jawbone does not help people keep a handle on rational market management, but it is entertaining for now as long as you’re not positioned incorrectly (like long or short, ha ha ha).
It’s stupidly comical in the way it continues so predictably with people apparently still taking it seriously. Well, the mainstream media do, anyway. I guess they are not really people.
Dow down 100, ‘Fed may delay rate hike’ story gains steam, Dow up a 100. What’s the diff? At some point this skittish silliness is going to end and the market will choose a direction.
Here is what is actually happening. We are in a long and slow (and I mean slooooow) process of witnessing the zenith of confidence in the Fed (Peak Fed) as one day, even the dimmest, most sycophantic market participant is going to cotton on to the fact that these people are no more knowledgeable or in control than the rest of us (they just have a bigger bag and more tricks). Peak Fed → Confidence drains → Market gets about its business.
It’ll take patience though; sort of like how the ‘Peak Oil’ promotion took a long time to play out. By the way, consider ‘Peak Fed‘ as a © ™ of Biiwii.com. It’s a great theme, and it is happening in my opinion, right here and now. Best of all, it’s got very distinct investment themes going forward.
Back in the December to February time frame we had been noting a ‘swing’ market (swing baby, swing!) AKA a Whipsaw market AKA a market for nimble swing traders. There is no trend (on the daily time frame). What there was a few months ago was an extended period of fleeting hard ups and commensurate hard downs. So swing baby, swing!… but stay nimble. Today looks like one of those after the hard drop last week.
Market participants seem to literally be jerking to every piece of data or information that comes out. Strong Jobs = panic drop, FOMC lameness = rally, some middle east noise last week and mixed econ. data = drop, some China easing hype today = rally.
NFTRH’s latest US stock market rundown is posted at NFTRH.com if you want to check it out. Besides this fairly normal run through of important US markets, #336 had a lot to say about keeping perspective on the whole ball of wax.
I really feel like we have got our shit together, to put it as a I would put it in real life if you and I were just sitting and talking. And I’ve got all the patience in the world to boot. Not only for playing US stocks, but the precious metals (which I feel we have managed pretty close to flawlessly thus far, and much of the rest of the whole ball of wax).
Hint: Use real data and objectivity and keep ego and bias contained, tune out useless hype and it’ all going to work out just fine.