Click chart to enlarge We've been talking to a lot of Wall Streeters about the near term future of the stock market, and telling them about the speculative activity brewing in the high end real estate market. Most of them are skeptical that we're out of the woods, saying that there are still a LOT of problems out there. Maybe we're being too optimistic, maybe not. Regardless, they all do agree that we've hit a bottom. They don't believe we're going lower, but are at the same time not willing to bet that we go much higher for a long time. The concensus of those we've talked to would result in a chart that looks much like the one posted above. Stage 1, if you have to give it a label. We're told that while the market should not plunge from here, it will not be a "V" bottom either. A long basing period that lasts a year or more is what many think is in store for us.
We're committed to doing very heavy buying anywhere in the lower part of the channel drawn on the chart, and selling near its top. There's little risk selling at Dow 9,000 given that the economy is unlikely to rebound without a long struggle. There's also little risk buying the indexes at or near Dow 7,000, or so we're told, as analyst expectations have already factored in armageddon. This guess is as good as anyone's, and we'd appreciate any commentary on why we should rethink this.
164 comments:
This is the worst scenario for long-term investors.
Try to look at other countries (Brazil, China, Korea, Russia so-so) but not Europe or Japan.
A consolidation after a drop of this historic proportion with financial meltdown of this historic proportion makes sense. Although I agree with you that everything seems to happen at a faster paste now and the global effort to fix the crisis is unlike the financial meltdown in Japan in the late 80s, I believe it will take the economy at least 3 years to function normally again. The market may rebound earlier but I don't see how it can be a real bull without a functional economy within the next 12 months.
I think the duration of consolidation depends on world events and it is hard to tell if it is in our favor. I really think based on how many anti-americans found in europe/ middle east when Bush was the president, an american triggered financial crisis would have warranted some sort of war if things got too disparate. I'd like to think Obama's peace approach and active governing have prevented the worst from happening.
On the other hand, expect harder recovery due to additional money required for adjusting to climate change. When you have increased number of wild fires or flood, people in the affected region tend to save more in anticipation for future mishaps. If this group of people increase many folds, the economy will most definitely take a toll.
I find this a compelling forecast, barring unforeseen earthquakes in the markets. But it seems like the chances for that have passed, at least for the time being. No more Lehmans hiding around the corner. What do you think the consequences of this are on Gold and Silver?
Real estate is not comming back .There will be another leg down. Where are the jobs going to come from. States are broke...
Hey Snot,
When you look at an index chart, do you use the SMA 200 or EMA 200 to check if the market is about to cross from a bear market to the start of a bull market? I'm asking this because I'm looking at the Shanghai index and Bovespa index and they have or about to cross the SMA 200 and EMA 200 lines. Also, I would like to add are these measures really significant or are there other factors involved?
~DL
I just have a general question and it may be stupid. If you short a stock and it goes bankrupt do you still have to cover your short or is it that you dont have to. Im looking to short GM and honestly have never shorted before but doesnt this seem like a pretty good bet that GM is done like dinner. Anyone have any thoughts. Thanx in advance
Wube, 2.5 to 3 years for the economy, 1.5 to 2 for the market... sounds about right.
If Bush were still in, then we'd be looking at an 8 to 10 year recovery, so we agree on that too. We don't put much weight on the climate thing, though.
Anon, we don't trade precious metals, but our guess is sideways with a downward bias over the next 2 years. They should sustain their values but not gain much.
Anon, real estate will come back a lot quicker than many think. Think about it, where else do you put your money? In a savings account making .05% a year? In the market with Madoff? Into gold at these prices?
Real estate still remains the best option, and let's face it, many people are unaffected by the economy. Cops, teachers, etc. They don't know anything is bad!
Anon,
We use the SMA, but it doesn't really matter. They are pretty close together in the whole scheme of things. Remember, these are not "lines" because this is not an exact science. These are "areas".
Anon,
You cannot ever short a stock below $5.
"You cannot ever short a stock below $5."
Why not? I tried AMD and Q, and I can short them.
TD Ameritrade doesn't allow shorting a stock once it sinks below $5. Isn't there a SEC rule that prohibits shorting a stock when it's below $5?
Icon, are you going to add to your SKF, SRS & FAZ positions today? If all banks follow suit with WFC those things could get ugly in the short term. But longer term?
Any guesses as to why the announcement of the "Stress Test" results is being delayed until the end of April? Is the Fed waiting for earnings to prop the bank stocks up before the stress test results smack them back down?
I bought some EWZ, EWY and FXI for longterm, but if the source index (Bovespa, Kospi, Hang Seng China Enterprises Index) of any of them goes below the 200SMA, I will sell. So I'm not a traditional longterm investor. :)
Mitchell: my broker (mbtrading) does allow to short stocks below 5 USD.
I've actually got my eye on FXP. FXI has formed a beautiful channel over the last 40 days. And now its crashed into the 200dma. I've been waiting very patiently, agonizingly, for this to happen. I'm buying FXP.
When the channel on FXI breaks, I suspect it will mark the top of this rally.
Dow seems to want to convincingly break the 75 day MA...snot what are your thoughts.
i am the proud owner of 200 shrs FAZ @10.81. i don't care if it goes to zero, it looks like a good hedge for my longs here. long term it could go to 300 again if the banks fail. what a lottery ticket. get some for yourself tonite before the markets close. 888888888888s
FAZ can go below 5 USD in no time. :)
But it's a good idea for hedge, based on some price targets several banks have topped out today so they need consolidation.
Snot,
This is a fascinating chart. How did you generate the “forecast” price (gray line)? Is it mathematical equation/formula based or overlay of some segment of past price pattern? Is there any evidence, hypothesis or theory behind it? It’s interesting to notice that your moving average seems having utilized the “phantom” data.
Icon, you always post about your buy signals but rarely have you posted what your sell strategy is. I get the impression that you don't use stops since you've never mentioned a target stop-loss, so what is your plan for the 25% of your money that you deployed into SKF, FAZ and SRS? In the 2 days since you posted: "We are at a point where the cyclical gain from SRS/SKF should be greater than the attrition loss" SRS has declined -37.18%, SKF has declined -38.48% and FAZ has declined -72.06%. So on the 25% chunk of your money, you're already underwater by at least 40%? Probably more since you've been posting that you started buying earlier than 4/7.
So my question to you is this: What is your plan now on those three? Are you going to add more? Are you going to sell and take a loss? Or are you going to wait it out and do nothing, hoping for a correction that will bring you back to even on those?
I'm 100% cash so I'm pretty non-biased as to where things go from here, but when I look at the chart of the S&P I'd be scared to be short right now. What do you see when you look at it? A chart that's ready to breakdown? Or a chart that's ready to breakout? Looks like breakout is imminent.
I must say that I admire your risk taking though, fighting the Fed takes some brass ones!
Thanks Icon, and everyone have a safe and Happy Easter!
Is FAZ even a buy here @ $9.60? Tomorrow GS could easily push this thing to $4.60...or $14.60. Place your money on the roulette wheel folks!!
Snot, your opinion on WMT a couple of weeks ago in this blog is very similar to this well written article.
article
I bought WMT on Thursday, but just for a very short-term play -- probably one week. WMT was down 4% on March comparison sales for 2008/2009 when the market was up on Thursday about 3%. Easter came in March in 2008 and Easter was in April in 2009, so WMT said the numbers would only be down for the month, not the whole quarter. I took it as a short-term trade opportunity, and thus far it is working well that way. WMT is up today while the market is down. Long term, the article above does not think WMT will outperform the market the same as you had suggested. If I get 4% or 5% out of it in a week, I'll be happy with what should be a fairly non-risky trade.
Joe
Mitchell, you won't get a reply from Iconoclast421. He only posts when he can be smug and superior sounding. When he can intimate that everyone else is a 2nd grader compared to him. Now that things are going against him you won't be seeing any multiple paragraph explanations as to why he was so wrong on the calls you are questioning him about. You only get his endlessly blathering "I hope I don't break my own arm patting myself on my back" posts when something goes right for him. Which is maybe 50% of the time, at best. Certainly no better than anyone else who posts their picks here. When it comes down to it Iconoclast421 is just another "Gary". :)
Hubris is a bitch and it will bite you in the ass every time as he's now finding out!
thank god that somewhere out there, there are humble posters on internet discussions.
...
they're probably boring discussions, though.
One of Gary's picks, AGLT, broke out today to $55ish. Top of the channel...may be a good short-term shorting opportunity. Thoughts?
I take profits at 5 and 10%, I dont get too greedy. I was at 25% on tuesday, took profits on wedsnesday. I was at around 18% invested on thursday when the hit came. That basically wiped out my big SRS trade from tuesday (the one I had been planning for 2 weeks). Since the shares of FAZ and SRS I had been holding were basically free, I just held onto them. Like I said before, I dont have a top signal which makes what I'm doing now rather foolish. I'm back up to 20% with the addition of FXP. But I will not be going higher until I get the top signal. But evenso, I am confident that what I hold will not need to be sold for a loss. And Violet, once again you have no idea what you're talking about. I have plenty of bad trades, and the vast majority of the time they are from me not following my own rules. But those trades are always small.
I havent posted any charts in awhile because the rally has been too short lived to do much technical analysis. The picture is starting to solidify now though. So here is a big rsi composite chart of SPX XLF, and I threw in LDK just for kicks:
SPX-XLF-LDK 4-14-09First of all LDK is the easiest call, as usual. I've placed blue dots at key intersections on the rsi charts. LDK could drift toward either of those 2 blue dots. If it does it is extremely likely that it will bounce off them. A bounce off the high blue dot generates a sell signal and from there it is likely that it breaks down completely, marking the short term top for LDK. That is my prediction... that LDK tops today or tomorrow, then breaks down. However if LDK goes down tomorrow and closes on the lower blue dot, then it could have more legs before it breaks down.
On to XLF. XLF formed a new rsi resistance line with today's selloff. I know I said I wasnt buying more FAZ till I got the top signal, however it would have been crazy of me not to buy when I woke up this morning and the first thing I saw was this jumping out at me. Note that a new rsi support line was formed on thursday, and had I been following my own rules I would have sold everything at close last wednesday. At any rate we're in the middle of a range now so it could go either way. My short term target is the middle blue dot. My mid-term target is the LINE that the bottom blue dot is on. As usual, my general strategy is to sell as we approach the middle blue dot's rsi support line. I will not buy more FAZ until XLF reaches the rsi resistance line marked by the top blue dot.
Now on to SPX. It is basically the same picture as XLF. 3 blue dots placed in much the same position. Obviously this rally is being driven by financials, so this is somewhat redundant. The key thing to look for at this point is the failure to reach the line marked by the top blue dot. I'll be looking for a "stunted" crest (similar to the ones on this chart, indicated by the red arrows). Sooner or later that is going to happen, and that will be the beginning of the potential top formation that I am looking for. If it is indeed to be the top then what will follow next is the break of the rsi support line marked by the middle blue dot. That is what tells me that I need to start increasing my short position up to 50%. Not all at once of course, but over the course of a couple weeks I'll accumulate at the best price possible, and more importantly, I'll drastically reduce my selling. That is the BIG play, the one I wait months for.
SRS down 15%
FXP down 7%
FAZ down 13.5%
LDK down 1%
But what inquiring minds really want to know is this - who is Violet? As the old song used to say, "Are you a boy or are you a girl?" With your writing style, you sound like a boy. You sound like a certain well known person on this blog! But I guess that must be kept secret. You are probably a shrinking violet.
FXI powered right through the 200 day MA. Icon, did you sell your FXP?
Nope. I dont know what theyre smoking over in hong kong, but I want some! I admit I did not have any technical justification to buy FXP till now. (Like I've said in the past, following my own rules is hard to do... I'm just not patient enough to wait for these key patterns to develop.) But I do now have strong technical justification for buying even more FXP. Take a look at this chart:
FXI-4-15-09Picture perfect buying opportunity. This formation wont always yield a winning trade, but 9 times out of 10, it does. This pattern is where the vast majority of my gains come from. A down day tomorrow produces a new rsi resistance line and thus a buy signal for FXP. I buy in anticipation of that signal. I will sell as we approach the rsi support line marked by the blue dot. Obviously what is marked by the blue dot is a major rsi support line, and it is backed by a solid channel on the price chart too. I dont expect FXI to actually break that line yet, but I will hold onto some FXP in the event that that line is broken immediately. I expect it to break shortly after OP-EX. In other words, in the next 3-5 days.
The problem is you watching FXI, but the source is the Hang Seng China Enterprises Index which is already above the 200SMA.
Btw the index needs a correction, the calculated target price of "mini" double bottom (~9100) has reached.
Here is the comparison:
http://finance.yahoo.com/echarts?s=FXI#chart4:symbol=fxi;range=1y;compare=^hsce;indicator=sma(200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
FXI's profile is: "The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index."
FXP's profile is: "The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 index."
What's the problem seeer?
SNOT! last i posted houses here in DC area have lost 2/3s their value. here is a graphic example. this house(10 blocks from the DC line, in MD) sold in 2006 for 340K. yesterday, it sold for 75K. this is what i am up against trying to sell my house. i did take 3 people by this house yesterday, and tried to encourage them to buy. this morning it has been removed from the sale list as having a contarct on it. there are 20 more like it in this neighborhood. feels like we are in michigan. here is data with link if it works:
Transfer Information
Seller: CASTILLO,CARLOS A & RAMON RAMO Date: 07/14/2008 Price: $150,000
Type: NOT ARMS-LENGTH Deed1: /29858/ 556 Deed2:
Seller: MEJIA-ARIAS, BERTILLA D E Date: 05/19/2006 Price: $340,000
Type: IMPROVED ARMS-LENGTH Deed1: Deed2:
Seller: BOSTON,ANTHONY C & RENEE S Date: 11/08/2004 Price: $212,000
Type: IMPROVED ARMS-LENGTH Deed1: Deed2:
http://sdatcert3.resiusa.org/rp_rewrite/details.aspx?County=17&SearchType=STREET&AccountNumber=17%20%201906122
88888888s
IYR is a screaming sell right now. I think even a monkey can see it, so I'm not going to post a chart. But needless to say it's another pretty one just like the above chart of FXI. The price chart has gone parabolic, but the rsi chart still shows that it is strongly channel bound. SRS @ 26.50 is an easy 20% in the bag.
But Icon, didn't you start buying SRS 40% ago? How do you know the market is not going to break out at this point and head for the 200 DMA? Banks are reporting profits! Economic indicators are now mixed instead of all being gloomy. We are well into earnings season and the market isn't tanking yet. Some commentators on CNBC who are traditional shorts say they have much fewer shorts and more longs. Yes, one should be cautious. I took some profits today and went to 26% cash, but otherwise I'm still long.
snot, got a little more info today from a broker who said friedman of friedman billings ramsey
( http://www.arlingtonasset.com/ ) has left the company and is buying up foreclosures from banks before they hit the market, repackaging them into blocks and selling the blocks to investors, who then break them down and sell them to individual home buyers. as usual, the big money is getting the best deals buying bulk quantities from banks. not sure if this will cause the foreclosure prices to rise or dry up the excess inventory faster, as there still is no market for these houses. it would seem to just be a convienient way for the banks to pass their problem on to someone else.
888888888s
Initiated positions in QID at $39.50 and SRS at $27 today. Hope for a quick 5-10%. Good luck.
http://www.reuters.com/article/mergersNews/idUSN1624656020090417
On Thursday the No. 2 U.S. mall owner, along with 158 of its properties, filed for Chapter 11 bankruptcy protection, ending months of speculation as to when, not if, that would happen. Company executives said they intend to sell some properties.
"The public companies we think are best positioned to capitalize on General Growth's unraveling are Simon Group Inc SPG.N, Taubman TCO.N, Westfield WDC.AX, and Vornado VNO.N," J.P. Morgan real estate investment trust (REIT) analysts wrote in a research note.
Icon, thanks for your charts and explanations, your RSI trading method of worth of studying. To your experience, does the RSI break a trendline before the price breaks, after the price breaks, or breaks at the same time.
Good time to buy gold/metal miners or not?
chart Joe
A good article on leveraged ETFs that says it all in a few words:
ultra ETFs Joe
Judging by the lack of conversation, you guys must have been on the long side today. Hope to sell SRS on a gap up in the morning.
What do you guys make of this rumor regarding the stress tests? It would explain the dumping of banks yesterday. BTW, did anyone go for my GDX suggestion last Friday? I did. It partially hedged my losses on Monday, not as much as SRS would have done, but no one is perfect except God.
link Joe
That rumor came from Hal Turner. For one thing I dont think it matters in the slightest. The market was going to go down regardless of any silly rumor. This whole rally has been gamed from the start. And secondly, Hal Turner is a disgusting piece of filth. If he isnt some kind of spook or provocateur, I'd be extremely surprised. I believe Hal Turner is the internet equivalent of the cop who goes into a peaceful protest wearing a mask and starts chucking rocks at the police line. Think that doesnt happen? Check out my youtube channel. Also, check out this deleted post from Hal Turner's blog.
Agreed, Icon.
Any trading advice this week or next?
Maybe the bad stress test results was a rumor put out by big time financial shorts to help them cover.
Icon,
Could you explain your RSI trading method in more detail?
I'd be interested in learning more about it.
Thanks!
Icon should start his own stock blog. Far far away from this one.
Icon has his own weblog, or he did, full of conspiracy theories and other strange ideology. When I noted that many months ago, Icon's slavish devotees attacked me. So Anon, be sure to post as Anon when you suggest things like Icon starting his own blog. Now, back to the ideology of this weblog -- Snotwheel's longer term approach to investment. As long as we drift around in the middle of the channel, nothing much is happening. No need to post every day. Save your commissions money, unless you are a daytrader. If the latter, this weblog does not cater to you.
Icon,
I find your RSI strategy intriguing, thanks for sharing it.
Do you use Twitter or Stocktwits? If so we can exchange shorter-term opinions (EOD timeframe) there.
I agree...Icon needs to start his own blog. It appears that Snot has disappeared. Perhaps he's too busy with real estate.
Yeah my blog is full of "outrageous conspiracy theories"! "Let us never tolerate outrageous conspiracies!" We must run and hide from them and lick the boots of the Nazis who love us so much! They would never steal trillions of dollars in an orchestrated plot and then convince the sheeple that it was all a big accidental blunder. Speaking of conspiracies, check out William K. Zabel's 10th anniversary Columbine interview. It's chock full of fact after fact that shatters the official story and forces "establishment thinkers" to firmly implant their heads further into the sand.
By the way I am calling a top right here. Either we passed it last week or we hit it in the next 7 trading days. I am loading up on FAZ under $9. I am aiming for $7.50. It will be at least $20 by June 10th. I will post a detailed analysis within 2 weeks.
What'd I tell you?
Icon,
Do you mind if you share with us how you came to the conclusion that the top is here (or that it'll be here with 7 trading days)?
Truthfully, I'm not trying to put a spotlight on ya, I am genuinely interested in learning and understanding the process that you go through to call the top and bottom of a trend and how you come up the buy/sell signals.
If you don't feel comfortable with sharing that, that's fine too. I'll stop asking. It's just intriguing to me.
In any case, thanks in advance.
No one said we're not tolerant of conspiracy theories Icon, we'd just like you to keep the discussion of them to your own blog. Is that too much to ask of you?
Thank you.
Icon, why don't you post your blog's URL here and your followers can follow you to your blog for your stock picks and your market advice and your extended postings on your own blog?
Snot, how does LFT's chart look to you?
Is Snot alive? Can anyone confirm? Thanks.
Icon, as you increase your short holdings, short holdings across the market are in decline.
http://www.reuters.com/article/marketsNews/idINN2444457220090425?rpc=44
This site is dead. Snot is MIA...
What would be the use of any commentary? The DOW's wagon wheels are stuck in the mud at 8K and the only thing anyone can do is wait and see which way it ends up freeing itself. Does it go up to 9K or down to 7K? I'll buy DXD or DDM when it makes a move, but until then this is one big ZZZZZZZZZZZZZZZZZZZZZ fest!
That's right Peanut Butter. Make a few percent with your play money on the dips and rips, but otherwise, the market isn't going anywhere. stability is kind of nice, though.
Anybody on here know anything about UNG -- other than it is one sick looking chart? How far down will it probably go? Indications -- other than the obvious in the chart -- pointing to a bottom and turn around? Thanks.
Disclaimer: I don't own it and never have.
Well I can't say I know anything about UNG but I did buy some the other day for my Roth IRA. I am looking at a 10 year time horizon. I do not trade like people on this blog. My personal belief is that UNG is close to being as cheap as it can get. If you look back on Natural gas prices I think it is possible it could go as low as $2.00 so that is not to say UNG has bottomed, but I think we are approaching the bottom and as such I have taken a position I am willing to hold. If it drops another 30% I will buy heavy into that and hold for the long run. I recommend you not follow anything I do as it is often wrong. I follow snot now just to get his take on the overall market.
Thanks squarpeg. It took UNG a while to come down. It will probably take it just as long to go back up, so I'm not too worried about missing the first 5% or even 10% of a run back up. But it sure is fun on one of those RARE trades to hit the exact top or bottom or within a few pennies of it. For a 10 year horizon like yours, you should do quite well. Maybe you'll get a 5 bagger.
I think to get UNG and hold it for 10 years is senseless because the demand for natural gas is cyclical, it will go up and down several times (look at the longterm chart) within 10 years. In this case I prefer to use technical analysis, you can identify when it has topped out (usually head and shoulders or double top reversal).
Btw until I can't see at least one higher low on the chart (of UNG) it's just waste of money and time (longterm or shortterm, whatever).
Meanwhile based on the volume pattern it looks like the bottom is near. But this is just a hunch.
Where's Iconoclast421 with his weekly "I'm calling a top right here" post? I'm sure if he keeps on posting the same thing over and over week after week ONE of these weeks he may be right. Then we'll have to suffer through another dissertation on how a 2nd grader should have seen this coming.
Thing is, Iconoclast421 didn't see this coming, so that must make him a 1st grader? LOL
FAZ hit $7.58 this morning. Icon was targeting $7.50 on it while loading up on it under $9.00, so the "top" within the next seven days could have been this morning's intraday high, according to Icon calculations. We'll see if he is right or if tomorrow's job numbers, earlier inventories numbers, and earlier consumer sentiment push us higher for a continued rally.
While Snot is on vacation, how about a survey of what everybody is holding? That might give everyone an idea or two for a future pick.
Longs: VZ, DIG, VISN (bought yesterday after earnings), DBC, UPW.
Joe
Actually I got a buy signal on the DOW. It is a classic formation with the creation of a new rsi support line followed by a break of an rsi resistance line. It's laughable, but it is what it is. I have analyzed this exact formation many times. From past experience, such a buy signal is worth about 5% on the index. That's 8300. I took the opportunity to get in very heavily on the short side this morning when the DOW was 8300. (Some of the position will be longer term, some short term, in order to get back under my target of 70% cash.) I did take note that if this rally continues for 3 more weeks it will intersect the 200dma at that time. I highly doubt it will continue for 3 more weeks but I recommend reserving 50% cash in case such an "opportunity" arises. It's only 3 more weeks... if you've been this patient then there's no need to get impatient now. If you want you can buy all the bullish bull. By I will maintain my tether on reality and say this this goose is pretty well cooked. Today presented an extremely profitable trading opportunity.
seeer....regarding UNG When I said a 10 year time horizon I just mean I have that long if need be. I don't need to sell anything in that account, but you a right it is cyclical so maybe 2 years from now if it seems at the top I will sell it. Your also right that the chart is ugly it keeps making lower lows. I wouldn't buy some companies stock with a chart like that, but this is a commodity, it is energy and pretty clean energy. Now there is no way that the global economy is going to get back on track and continue to grow without prices of energy going up. Natural Gas is not going to zero, neither is oil or coal. In that way it is a safe investment if you don't have to sell tomorrow it should at somepoint bring a nice return without exposing you to the risk you take with a company stock. IMHO
squarpeg: you're right.
But before I would buy it I would like to see some consolidation to form a base just like the oil did within a range. Look at this chart: http://stooq.com/q/a/?s=ng.f
Look the monthly back until 1991. :) It can go much-much lower. The price of natural gas in the last year was a bubble just like the oil's.
My theory is I don't wanna buy into the falling knife, cheap or not cheap.
Ruby your right. Let me see if I can get this straight. Icon calls a top then he announces a buy signal. But his announcement of the buy signal is after the DJIA has already rallied 400 more points. Let me do the math. 7905 x 1.05 = 8300. He could not have gotten the buy signal on Tuesday, because the DJIA opened at about 7950 and flew upward. So it must have been last Thursday. Amazing! He accurately predicted the 400 point (5%) rally a week ahead of time, but he did not bother to tell us until after it happened. After all, a week ago he was busy calling the top. His response to the buy signal was to go "very heavily on the short side" of the market at DJIA 8300, which he also announced (conveniently) after the Chrysler bankrutpcy news that reversed the market 130 points on the DJIA. A profitable day, we are told. If you say so. And then he tells us that the rally might continue for three more weeks but he quickly says that he does not think it will continue for much longer because of "reality" and the cooked goose. With predictions like that, one cannot go wrong. If you predict a top to the market and a buy signal together, if the market goes anywhere, hey, you were right. If it does not go anywhere, hey, your contradictory predictions canceled each other out and you were still right. If you predict a rally for three more weeks, but not really, you are covered either way. If you predict a 5% rally that hits the DJIA 8300, making your prediction after it has already happened, hey, no problem. But if he knew the DJIA was going to rally 400 points, why did he not go long for 400 points. That would be more profitble than riding a short down 130 points once the DJIA hit 8300. Let us see. 400 divided by 130. Why that is a difference of 300%! I think I have disscovered Icon's real identity. He used to be a politician, but he is now retired and playing the market. Do you ever get it wrong, Icon? I do. With employment numbers coming out today, I thought some SDS would be good. While at work I got stopped out of SDS and then it went right back to dead even.
LOL! Corsair that's spot on analysis of Iconoclast421's "calls".
I recomend estocktock.com where you can find what you are specting.
I'm all long and all my holdings are green. Is this market going to keep rocking, breaking out and heading for higher ground, or will it correct any time soon? China is rocking and FXP is dropping -- like lead.
Corsair are you saying that I do not make specific calls ahead of time, and that all my calls are made "after the fact"? Because I've got a dozen examples in these archives going back 6 months where I've repeatedly made calls well in advance that have been dead on. I suppose those posts werent real and were only edited it afterwards by hacking blogger? Or maybe sometimes I just dont have time to post? naww...
BTW IYR is at resistance right now. Here's my chart: XLF-IYR-5-4-09 A buy signal will be generated if that top line is broken. I'm betting it wont. Could be wrong. This is a dangerous time to be betting either way if you dont have thick skin.
Stop it Icon- you've also made a dozen calls in that same time period where you've been dead wrong and you know it. SKF, SRS, FXP, FAZ, SPY...just a few examples of where you've been wrong wrong wrong. You've also called "the top" week after week after week after week and have also been wrong wrong wrong wrong. So just stop it.
I can't believe you have the balls to come on here and once again try to pat yourself on the back. You are truly delusional.
If the nasdaq can close above its 200 day moving average of 1750-bullish.
If the nasdaq ever goes below its 20 day moving average of 1650-bearish.
ICON didn't comment on his contradictory calls where he tries to have his cake and eat it too. As for danger in playing it either way, not if you keep taking 1/3 profits on the rips and buy some back on the dips and keep some dry powder on hand and stops in place at all times.
Gerald, it isn't balls, it is hubris. Iconclast421, how much money have you lost today? FAZ is down 19%. FXP is down 17%. SRS is down 11%. Are you patting yourself on the back today? I hope not too many people have followed you down the inverse ETF route as they head to zero. And beware of drawing resistance lines merely from an RSI scale. See if your mythological resistance lines appear on a price per share chart.
I think you guys are missing something, it has to do with weighing. I'm going to try to explain this one more time, to make it crystal clear. Look at this chart, and compare it to the one I posted earlier today. They are totally different technical formations. One is significantly more risky than the other because there is both a support and resistance line in play, usually in a triangle formation. 90% of my volume comes from trades based on the type of formation where only one OR the other is in play. This seemed obvious to me but maybe its not. At any rate it is very easy to make up losses from bad trades if there is something to fall back on. In this case, the top of the channel at $35.50 for IYR. That's how I get back what I lose. It's the price you MUST pay if you want to catch the top (or bottom). Once sentiment shifts its off to the races, because you're in at the bottom with most of your assets intact. Most would say "you cant time the top", but you damn well can, and this is how you do it without taking a very heavy loss. I do not expect to lose more than 10% over the next 3 weeks in my anticipation of the top. But it will seem like a LOT more than that unless you read carefully what I just wrote. Like Snot says it is very important to have a damage control plan, and cash to be able to implement it. The pretty little orange line on the chart I just posted is my damage control, and it hasnt yet failed to bail me out and then some. If I were more patient I would trade off that line and only lines similar to that, and only when they are near the 40 or 60 rsi sweet spots.
But hey when it comes right down to it if you think I'm wrong, then bet against me. It's that simple. That's the beauty of the market. And good luck with that. If you're not willing to do that then all the jive talk is meaningless. In the meantime I got a large order for SRS set to trigger if IYR hits 35.40 in the next 3 days. I will put my money where my mouth is. If you think that number is crap, if you think there wont be a large bounce off that level, then put your money where your mouth is and bet against it. But you'd also be betting against Snot because the next trade I've scheduled also happens to be a standard channel trade on IYR.
All the resistance and support lines I have ever seen are done on a chart based on the price of an equity, not the RSI.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:support_and_resistan
http://en.wikipedia.org/wiki/Support_and_resistance
http://www.traderslog.com/support-resistance.htm
http://www.metaquotes.net/techanalysis/support/
But then I seem to remember, Icon, that you said you rejected all the other methods and had cooked up your own unique method.
I like to keep an eye on the channels and moving averages to look for obvious overbought and oversold conditions. We're in a major overbought zone right now. Here is a chart where I've drawn in a channel on the price chart, along with my best estimate on the trajectories of the 200dma (red) and 50 dma (blue) as well as a couple vertical lines that mark a zone where we're most likely to hit the 200dma. Even if we actually do hit the 200dma, there is going to have to be a pullback between now and then. It is possible that we go straight up from here to the 200dma with no pullback and no chance for me to do damage control, but I highly doubt that even in this crazed market. The S&P 500 could lose 50 points tomorrow and STILL remain in the channel. My plan is to short it just enough to undo my losses when it hits the center of the channel. I think that is a very level headed approach to doing damage control. And if we do go all the way to the bottom of the channel, I might even consider going long now that the 200dma is so close. I hope Snot will chime in soon because I bet he'd be playing this the same way.
Icon...good post. Snot gave up a long time ago. The blog has probably seen its better days.
As I said some time ago, let Gary the monkey short newspapers.
Buffett on newspapers
Snot said he's a seller at DOW 9,000 and a buyer at DOW 7,000. Nothing to do until then but sit back and enjoy the ride.
For an uptrending chart that has broken out above the 200 DMA, look at . . . . . . . yes, it is hard to believe, but it is true . . . . . . CROX.
While most equities are at the top of their channel, here is a possible buy for you guys to consider for a long. MCD.
Golden Arches Supper Club chart Joe
URS BKE
NVS
Charts pointing to 8000 DOW here.
Anybody has guts to short BAC today?
This market seems to be quite irrational...
I have been out of the market to get in and my patience is running out...
And where the hell is Snot?
Biere how are you seeing 8000? Bottom of the channel is 8100 (!) and there's sure to be a bounce off it before it breaks. At any rate I hope you're right because I dont enjoy being in for more than 50% when we're still so far from the 200dma...
Question is, "Will we see DOW 9000 and never go back to 8000?" The channel is rising. The 100 DMA of the S&P is now flat. Can the 200 DMA be too far behind?
FXP - down 7.6%
SRS - down 6%
FAZ - DOWN 19%
FAZ is now 30% past Icon's target price. Ouch! Want to see some pretty uptrending charts? Look at any chart over the past two months that is the inverse of Iconoclast421's picks. Don't fight the market -- in this case, don't fight the FED, the Treasury, the President, etc. and so forth.
I guess all of this taxpayer money is going to propping up the stock market.
To Anonymous who is out of the market and wanting to get back in. Here is my advice, for whatever it is worth. Tip-toe back into the market in small layers. That will help reduce your risk in case there is a major pullback. Buy only on red days in the market. Buy equities that are at least in the middle of their channels and lower if you can find any that are attractive. If you plan to hold long-term, buy equities that pay a good dividend and, more importantly, a reliable dividend (e.g. not a dividend that depends on debt). As Cramer preaches, preserve capital first and worry about avoiding significant losses. If you do that and buy smart, the gains will come. For other suggestions from Cramer on capital preservation, read here:
http://www.madmoneystocks.com/jim-cramer.aspx?id=8/4/2008&seg=1
(How do you guys make those links active?)
Yes, he knows his stuff. Some good advice in there such as spreading out your 401K payments throughout the year so that hopefully you are putting most of your money in when the market is down, so you get more value, more bang, for the buck.
Good luck to all.
The market cant turn until everyone is back on the bandwagon and all the hardcore bears have pulled out. We're close to that point. The big money has spent millions on web crawling software that quite accurately gauges market sentiment. When it reaches a crescendo that's when they go short and leave all the suckers hanging out to dry. So I have a message for them: I am now a devout follower of Cramer and Kudlow. They are geniuses. I am going all in on FAS and BGU now! Load up! To the moon alice! The recession is over! All hail the printing pre... I mean all hail the genius of quantitaive easing! Get in now, dont be left behind! Generational BUYing opportunity! Alert! Alert! Alert!
Learn from Icon people: see what happens to a person when they start carrying massive losses with no exit plan. Icon has now officially become the IBCNU of this blog.
And AGAIN you're calling the top Icon?? Really?!? So that's number five? Or is that the sixth time in the last three weeks you've made that exact same call? I've lost track. Keep calling it, sooner or later you'll be right. Then write a long post telling us how a 2nd grader should have seen it coming! LOLOLOLOL
I told you guys Iconoclast421 was a conspiracy theorist fanatic and that influences his calls and his view of the market. Today it appears that we will go higher. Not because of some secret plot by big money and their web crawlers, but because retail store numbers month-on-month comparisons are up. Job losses are slowing, and they lag the market, but they are slowing. GM is up in premarket. FAZ is down another 11% in premarket as we await the stress tests. On April 23 Icon wrote: "By the way I am calling a top right here. Either we passed it last week or we hit it in the next 7 trading days. I am loading up on FAZ under $9. I am aiming for $7.50. It will be at least $20 by June 10th. I will post a detailed analysis within 2 weeks." On April 23 the DOW closed at 7957. Now it is over 8500 and will pop over 8600 today unless the stress tests reverse it. Read the news on the front page of the WSJ, Iconoclast421. Listen to CNBC or Bloomberg. If you want to know market sentiment, it is reported in all of those places and on the web where that information can easily be obtained by anyone. Just GOOG "market sentiment" and you will be busy for months if you follow all the links. 21,700,000 hits for "market sentiment".
At $4.63 in premarket, FAZ is now 1/2 where you started loading up on it. But, according to Iconoclast, my positive post added to his "fake" positive post will give big money an incorrect reading on sentiment with their sneaky web crawlers and the market is set to plunge due to the crafty big shorts. Ignore retail sales. Ignore earnings. Ignore real news. But what perplexes me, yet, does not surprise me, is your contradictory call. You say the market won't go up until the hardcore bears have pulled out and that we are close to that point. Then you turn around and say that when we get to that point, big money is going to short the market. You have done it once again. You can point back to your post and say, "I was right." If we continue bullish, you can say that you claimed we were close to that point (even though we have been climbing for two months). If we have a correction, you can claim it was because big money shorted the market. Genius. Make opposite contradictory predictions in every post so that you can always be right. How many of you guys have ridden FAZ down from $9.00 to the $4s based on the seer Iconoclast421? I guess when the next consolidation or correction comes, because the market never goes straight up, Iconoclast421 will cry out, "I told you so."
Forget web crawlers and geniuses. Buy low in the channel and sell high in the channel. Buy strong stocks (once we figure out which ones they are, until then buy the indexes) and only short weak stocks or sectors as a 3% at most hedge. Be aware of which Stage a stock is in before you buy it.
http://www.streetauthority.com/st/bonus/right-side.asp#1
Where is Snot? I think he has become a flower child. The discerning reader will understand.
An "expert" says to buy the dips. That doesn't mean to buy Icon's picks.
http://finance.yahoo.com/tech-ticker/article/242971/March-Lows-a-%22Textbook-Bottom%22-Buy-the-Dips-Says-Schwab-Funds-CIO?tickers=SCHW,SPY,DIA,^DJI,^GSPC,^DWC,^RUT?sec=topStories&pos=8&asset=&ccode=
No Anon, it's just others copying my name so I've had to branch out into other varieties. I seriously doubt Snot would bother writing under a nom-de-plume since the name Snot already IS one.
Can you guys stop attacking Icon? Nobody can be 100% perfect and he was right many times before according to my memory and at least he provided his plans, charts, etc. What are you critisizing guys do to this blog other than attacking people.
I want to see what other guys are thinking and their oversight, not hurting people each other.
By the way, what are your plans? subbuilder, hk, etc?
You guys are funny. Where were yall when I was saying GE was a screaming buy at 6.10? Did I say GE was a buy at $7? 8? 10? 15? 20? No. Because I know what I am talking about. I called the bottom on this market before anyone. Called it back in febby. Was a week early. That wasnt pretty, but it doesnt matter now that I was off by a few days does it? Calling the tops and bottoms is never pretty, and you're never right when looking at it through the daily tunnel vision. I really dont care if SRS goes to $10, because I will make enough on the way down to get my cost basis low enough to profit handsomely when the market turns. Days like today are what make that possible. I dont expect to be making much money while we're closing in on the 200dma. I EXPECT to be underwater. But it just so happens that I am doing fine this week. I am seeing an extreme lack of patience on this blog. You guys are all going to get creamed if you dont learn to sit back and let things play out.
Wow, it has become a soap opera in here.
Question for the group. Is oil forming a new bubble? When, if at any time soon, will it be the right time to short oil? Or (the horror) will oil keep going up like last year?
DTO chart DXO chart OIL chart USO chart the horror Joe
Selective memory is a beautiful thing, isn't it Icon? LOLOL
Snot is alive! He just deleted my post.
Will FAZ be a buy when it hits 0.14 cents?
For whatever it is worth, this is Yahoo's link to research info on stocks. I go here to check on the calendar for economic news like jobs numbers and also to find an earnings date for a company. The earnings date list has a search window in the top left corner. It will take you to the closest known earnings date, forward or backward. Since it can be precarious to hold through earnings or, alternatively, provide a possible opportunity to short, I hope this will be helpful to someone.
Yahoo stock research page with earnings dates and more
Yawn.
FAZ might be a buy when it hits 14 cents. And woe to whoever holds it that long without trading it. All I know is it was a buy under $5 last friday. And you can buy a hell of a lot of it when it's only $4.65. Today XLF has some support at 11.65. I am reducing my position back down to 20-25% and awaiting the next leg up.
The next leg up of what? The market or your shorts or some sector or some inverse sector short? You reduced your position down to 20-25%. So did you sell your FAZ that you bought at $9.00 or that you bought at $7.50 or that you bought under $5.00? If the former, how do you bookkeep for IRS wash rules?
What about the FAZ in the mid 20s that Icon bought? What about the SRS that he bought in the 40s? What about FXP? Icon has been wrong and early SO many times why would anyone care WHAT he blathers on about any longer?
Everyone should also take note that Icon's posts are becoming intentionally obfuscatory so he can go back later and "explain" to us (since we're all 2nd graders compared to him) what he meant. Of course he'll fit his "explanation" to whatever happened in the market. Funny how it ALWAYS works out that way, don't you think?
I use tradelog to record wash sales. It is a very useful tool and it makes it easy to do your own taxes.
As for all the stuff I bought that I lost money on? Yeah that's what happens. They get canceled out by gains I make when I short the top of the channel. For example I dumped the rest of the FAZ I held from $18, the 300 @ $14, the 500 @ $9, etc using the profits from the 5000 @ 4.65-5.25. It's all about getting the overall cost basis down. I need FAZ above 6.1 in order to totally get back into the green. If it does, that's fine. But if SPX surges to the 200dma then I will buy 7000 FAZ at around 3.66. And 5000 more at 3.33. The amounts/prices might change depending on where and when SPX hits the 200dma, but that is my general strategy. It is basically just a channel trade at this point. Last friday we were at the tip top of the channel, and I took the opportunity to lever up and wait for a correction. We are now very close to the bottom of the channel, so I reduce my position so that I have plenty of cash available to buy at the next top of the channel. In this way I offset the brutal decay on these ETFs. This is exactly what Snot has been talking about for a year on here. The only difference is that when the market turns and the channel breaks, Snot's method hands you a big loss. The method I am using will result in explosive gains IF the channel breaks to the downside. But if the channel does NOT break to the downside, I lose about 5% a month, unless we do a lot of bouncing from the top and bottom of the channel. Small price to pay, as far as I'm concerned.
On a side note I think an oil correction is due. I am starting a longer term position in DTO immediately. I'm looking to hold for about 2 months or after 33% gain, or after storage returns to normal levels, whichever comes first.
Hey Iconoclast421; where is SPX dipping to, 875 and then rebound? I want to unload FAZ before the upmove.
Bottom of channel is at 882-884. A new rsi support line will form if we close in that same range, so I expect we will. Should get a bounce tomorrow. I would not be surprised if we run straight for the 200dma from here. No doubt the media is spinning this as a minor correction before shooting higher, and I think a lot of people are going to play it that way.
I just noticed a convergence at 87 on SPY. (I guess that's about 860.3 on $SPX.) If we start tanking tomorrow its a good bet we bottom out there. If we get there I will go long. I'm setting up a trade trigger for a market order for TNA when SPY reaches 87.1, and setting another trade trigger for a tight stop at 86.8.
Thanks much. Would you expect a bounce just because there is option expiry on Friday, Or does it matter for that?
Here is the detailed analysis that I promised. It covers the financial rally from start to (possibly) finish. Note that its all a game of probabilities, but the buy and sell signals have all been generated using a strict set of rules. If someone else were to do this analysis, the results might vary slightly because they might see things I dont, but all-in-all the probability ratio for this rally would be extremely bullish no matter who does the analysis. (The ratio of the last 10 signals was 8-2 up until this week. That's crazy bullish.) However, 3 sell signals in a row is bearish. Now the ratio for the last 10 signals is 5-5. We are at equilibrium now. See how this works? These rules have never failed me. However I frequently fail to follow them by not adjusting my position as dictated by these buy and sell signals.
Thanks for sharing. I believe we should have a bounce over SPX 900 but not sure whether it will be up to 200 dma. Also can not tell if it would go lower to 860-865 area before rebounding. If we have a reversal during the day that I can spot in time, I am thinking of selling half of FAZ.
Please stop polluting this blog Iconoclast421. No one cares and it's gone beyond annoying. If you had ANY talent at all you'd have your own blog and wouldn't have to hijack someone else's. Pretty pathetic when you think about it.
Why don't you create your own blog and leave the address here and those that wish to follow you can. Thank you.
Some invisible hands are forcing you to read buddy. Get rid of them and have peace.
Tushar, are you Icon's alternate I.D. so that he can converse with himself and pat himself on the back?
Icon's charts are bizarre. I have never seen anyone draw so many resistance lines in such close quarters on an RSI chart. Every little glitch in the market is supposedly a buy or sell signal. Yeah, right!!!!!!!!! And I'm Warren Buffett and Snot is really Cramer.
I am not Icon's alternate I.D. and apparently you don't have any I.D. shown up here.
Right on Anon- "Tushar" is yet another alter I.D. that Icon made up so he can ask himself questions and "thank himself" for posting his convoluted trainwreck charts and his market guesses. Isn't that sad? No one cares so he has to hijack someone else's blog to be heard. I haven't seen one person on here ask Icon to start his own blog except for the person that wants him to do it so he'll go away. That pretty much says it all.
Iconoclast421's blog:
http://anythingexceptthetruth.blogspot.com/
But it doesn't have much traffic.
Check this chart on IYF and compare it to Iconoclast421's funny chart with resistance lines coming from all different directions. Print out both this chart and Iconoclast421's chart. Try to duplicate all of his RSI resistance lines on a price chart. See if there is any convergence like he claims to have found. See if the lines match up. They don't. This is voodoo chartology. Not only will it not match up on a price chart, if the RSI chart is spread out more horizontally, Iconoclast421's lines don't work any more. It is because he is creating resistance lines on a daily basis. It takes some time with buyers or sellers doing their thing to build up some resistance or some support. It doesn't happen once or twice a day.
Again, I don't see anyone else drawing loads of resistance lines on an RSI chart, and on every tiny blip on an RSI chart. The RSI chart is a relative index. The following article is a decent brief article explaining its use, and Iconoclast's voodoo chartology isn't the way to use it.
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:relative_strength_index_rsi
Now go to one of Snotwheel's charts. Snotwheel draws a chart based on the price of a stock and he finds a trend upward or downward based on several weeks, or preferably several months of market activity. He then draws an approximate channel on that basis. That makes more sense. Come back from your vacation or wherever you are, Snot. Rescue us from voodoo chartology.
Sorry, I left off the IYF chart:
http://stockcharts.com/h-sc/ui?s=IYF&p=D&yr=0&mn=5&dy=0&id=p35970584398
Been away for awhile, but have been noting the last month's comments. I got stung hard in early March when the turnaround happened. After a couple of Snot's charts about the channel breaking, I figured it was time to short the market. Ouch, but was that wrong. I admit that I was probably misinterpreting what Snot had to say, but boy was it expensive.
The major factor that I allowed to color my thinking was that I am basically in the epicenter of this economic morass. The economy here in Michigan has cratered, and, while the rest of the country/world is looking for signs of recovery, here the rate of descent is growing ever steeper. We are forecast to hit 20% unemployment by the end of the year. So the problem has been to look outside of the area for a larger picture of what is going on.
Some thoughts:
1: Watching the channels is critical. I think we are in for a protracted state of sideways movement for the DOW and taking advantage of relatively short term channel movements will be one of the few ways to make money.
2: Don't mess with the financials. The rest of the economy may be in a mess, but certain financials will be strengthened no matter what. This is one reason for the prolonged sideways movement. Too much money has been pumped in here, and it will greatly affect the ability of the economy to shoulder the burden.
3: Oil has certainly reached a bottom (duh), and will probably be a good short term play as it continues to move up. Last summers' ridiculous shenanigans won't have a repeat, nor will it remain at the recent low levels. That just wouldn't fit with our current administration's fixation on higher energy.
4: The recent pullback in financials may be a good entry point for a short term play.
5: Tech may be a bright spot for a time to come. There is an amazing amount of innovation going on here. The folks in this industry are amazingly forward thinking.
6: Don't forget investments outside of the market. Land/realestate has taken such a hit that, viewed in terms of an entry point, you can't ask for a better position. (I plan on purchasing two 40 acre parcels next summer. They are for sale now, but I'm betting that the price will fall significantly by the end of this year - heading into next.)
Finally, give the Icon stuff a break. This is getting stale. I categorically ignore comments from those that criticize, but have no positive comments or ideas of their own. I thought the whole point of blogs such as this was to share insights and techniques that would help others to better invest. Sniping at others is fruitless.
I look forward to the next blog entry from Snot, as do many others.
Why give Icon a break? He has been advising people to short the market for well over a month now while the market has been going up 1000 points plus on the DOW. That's expensive for anyone who has dared to follow his advice. Most of those who have dared to criticize Icon have given positive info, but they have given it under their regular name. They have used anonymous or a fake names to voice criticism because of the Icon faithful who want to defend him even as his calls cost anyone money who dares to follow them.
To the Icon skeptic(s) --
You are ruining this forum. Please stop. Every person here is able to decide for themselves if they should consider Icon's advice or not. I find it interesting to see other people's strategies, even if they are unconventional. Nobody is forcing you to take his trades, so relax. You add no content yourself and only pollute this space with your criticism. Consider contributing something interesting -- other than how much you disagree with Icon and why we all should too, as if that will save us bundles of cash since we blindly follow his every move -- or go to the Yahoo boards where you will find a more supportive audience. Frankly, you sound like bitter losers to me.
Given that this is Snot's blog (I think), it would be nice to hear what he thinks of Icon's strategy (maybe he's already commented on it?), but more importantly if he appreciates the input here or if he would rather it be posted somewhere else.
Sky Trader, try being consistent. You criticize others for not offering anything other than criticism and then you offer nothing but criticism. You seem to suggest that Icon's critics are losers who have lost on his trades. What a laugh. If you will read the critical posts, Icon's critics, and there are more than one of them, have offered positive trading information and they claim that they have offered positive trading information in other posts under their real names, but you either ignore that fact or you think they are lying. Finally, you don't want people criticizing Icon, yet, you then call on Snot to offer his appraisal of Icon. What if that is criticism? Be consistent. The only place where I can agree with you is your thinly veiled hint that Snot is one of the Icon critics.
Market news: India market up 19% post-election.
Anyone been watching POT and FSLR lately or have you been too busy fussing?
Anyone who shorts the market should always be aware of the risk of manipulation and intervention. In this environment, shorting is betting against taxpayer dollars being illegally used by criminals to prop up the market. Everyone knows that is what is going on, they arent making much attempt to hide it. It was predicted by myself and others 2 months ago and confirmed when the Fed announced monetization. It wont work, the looting that accompanies this criminal operation will lead to broad asset deflation. But in the meantime there are short term gains to be had. I am willing to hold a short position in this climate only because I believe I can trade my way out of the attrition loss. If you cant do that, dont have the time, etc, then dont.
Regardless of how silly it is or was to be short for these past few weeks, the game is changing now. Anyone who is still long when we hit the 200dma is certifiably insane, whether they end up making money or not. When those banks start paying back TARP, it will set forth a game of hot potato where banks race to pay back the money until we're left with a few who havent. Their stocks wont be going up while this game is going on. They all know it, that is why the Fed is colluding with the banks to help them raise capital. It is quite possible that the TARP money will not be repaid at all, even by GS. Why pay it back when you can take it and lever it up to get a 50% or greater return on any nascent bubble that may or may not be forming? If they pay it back, it means that there is no high yielding investment. Considering these big banks are criminal rackets of epic proportions, the possibility that they cannot make money off their TARP funds can only mean that something pretty bad is going to happen.
Cramer called a bottom on GM a year ago. I'm calling a bottom on GM right here. :) The government doesn't want them to go under. The Democrats in particular will support the unions and we know how much they are tied to GM. A few questions I need help on. Does GM still have preferred shares? If so, what is the symbol? Is it the same price as the common shares? I'm thinking of buying a few hundred and doing the old, old strategy of buy and hold. If GM doesn't go BK, then in three or four years, I could get a three or six bagger. Am I nuts?
Poor sad twisted little Icon. I feel sorry for the people that have to endure his presence on a daily basis. What an energy drain he must be.
Possible buy. Do your own DD, of course. CMCSA might be setting up to be bouncing between the 100 and 200 DMA and good for short-term channel trading.
chart of CMCSA article in Forbes that mentions CMCSA Good luck to all. Where is Snotwheel?
Sorry, been busy for awhile. Not much going on in the market, though. We're getting ready to sell some SSO if the Dow gets close to 9,000. We hear that much of this rally is due to the government bailouts, injections, stimuli, etc., and when it's gone, the market will show the economy's true colors again. This is much in line with our original thinking that we'll be range bound between 7,000 and 9,000 for a very long time. Analysts are back to raising their earnings estimates thinking we're back on track. There will be a quarter coming up soon where the reality that all of those paper "profits" were just bailout funds. People forget this so quickly. Like the automakers, the banks will be back for more bailouts, hence Dow 7,500 again.
We're not going to sell everything because we're only 1/3rd invested and still looking to buy for the long term. But scaling back to a 20%-25% position at Dow 9,000 makes a lot of sense.
XLF is at the bottom of its channel. DOW is 90 points above the bottom of its channel. SPX is 11 points from the bottom of its channel.
Banks MUST rally tomorrow or a lot of technical alarm bells are going to sound.
I've bought more FAZ under $5 than I have over $5, but I'm getting rid of most of it in anticipation of XLF making another run. My targets for XLF are 12.20-13. I dont like the wide range but I'm seeing resistance at 12.20 that it might not be able to surpass even if the broader indices go up by 3 or 4 percent over the next week.
Snot: and what if the market can't reach 9000? Will you hold your longs if the market head lower from here?
Icon, XLF was at $12.20 early today (Wednesday). It was there late on Monday and it was at $12.50 on Tuesday. It is below that only because of the FED minutes as the market tanked. Financials took a particularly hard hit. Did technical alarm bells go off on April 21st (intraday)? Why "MUST" it rally tomorrow to prevent the aaauuuuugggghhhhhhaaaaa? But I hope it does bounce back to the top of its channel in the next few days, since I bought UYG for $3.82 at the close today, since financials were getting somewhat close to the bottom of their channel, after selling the crap out of the longs of my portfolio for the last two days of this rally.
So Icon, after a 1000+ point rally, are you really about to go long? So this isn't the top? So the charade of corruption isn't about to be exposed and everything isn't about to collapse back to new lows? You really are coming over to the dark side? Welcome, brother! May the force be with you.
A brief article on a similar trading philosophy to that of Snot, except it would be from a margin account, not a retirement account, where one would short while in stage 4 of a stock or the market.
http://www.swing-trade-stocks.com/stock-market-stages.html
You misread me if you think I'm going long or bullish in any way. For me it is only a matter of being more short or less short. When I think the market may go up, I reduce my short position down to as low as 10% (but never lower) and when I think the market is at resistance and due for a pullback, I increase my short position to 40 or 50%. Right now I'm at 20%. That is "slightly bullish for me", but in an overall bearish context. I simply will not go long this market at any price over DOW 7000. And even then only under certain conditions. If this thing rolls over and starts going down hard, I likely wont be buying until SPX is at 550, assuming an august target, 500 for sept/october.
Yes, Icon, I misread you. You said you were getting rid of most of your FAZ, not all of it. My bad.
seeer, yes, in that case we'd just look to buy another 33% near 7,000.
Snot, I'm assuming that we are in stage 1 now which is a sideways stage of consolidation. Is that correct. Traditional wisdom says to stay in cash. You are staying mostly in cash and buying only the indexes until a recovery is in sight and stage 2 can begin. What about the wisdom of putting some money in closed end bond funds that pay a double-digit dividend during this stage instead of leaving so much in cash? I'm thinking of funds like HIO, MHY and MSY which have a Morningstar rating of at least 3 stars and preferably 4. One can sell them at any time if one is wanting to pile back into equities.
What a day to come back from vacation! The bond market is imploding. If you bought a 10Y Treasury Note 2 months ago, you've already lost 13%. That is insane. The losses on the long bond are even more obscene. This is the price being paid to pump up the banks. Obviously it cannot continue for much longer. 30 year fixed rate just popped 30% in one day. This is really serious; why the market isnt crashing hard is beyond me.
You are correct there, Icon. I checked my conservative mutual funds a week or so ago to make sure that the bonds were corporate bonds and other types and not US Treasury bonds. I've got 2% or less of Treasury types. Today I bought some closed end bond funds made up mostly of overseas bond funds for sell in May and go away. Obama wants us to invest in the market. On the other hand, the gov't wants to print lots of money. Some idiot called into Limbaugh's show one day and tried to tell Rush that the solution to the financial crisis was for the USA to print up a bunch of money and pay off all our debt with cash and then we wouldn't owe anything as a nation. Rush tried to explain to this good ole boy that he had not proposed a viable solution.
Time to buy airlines as a "relatively safe" short of high-flying oil???
chart of FAA which is an ETF of airline stocks
Icon, do you have an exit strategy or are you holding on even now and the rally picks up steam?
To all longs, how can you increase your investment without chasing the market? Is the only option to wait for a correction?
Exit strategy? If I was long I'd be worrying about my exit strategy. Been waiting months for the 200dma. Right now is imo a perfect shorting opportunity. TZA all the way. I want the DOW to hit 8750, but at 8720 its close enough for me to move to 40% short. Might be 50% by eod.
Agreed ICON...200 DMA is a gift to sell here.
Icon, you think Snot, who has been long for probably well over 1000 points on the DOW rally, should be worried about his exit strategy? His exit strategy is taking profits near the top of the channel and going back to 30% cash which is better than averaging down yet again. I hope you are right and that we do head down again, since I've been taking profits for several days now. However, lots of positive signs are showing up.
http://finance.yahoo.com/news/Hopeful-signs-for-economy-apf-15405490.html?sec=topStories&pos=4&asset=&ccode=
http://www.bloomberg.com/apps/news?pid=20601087&sid=atmqITBt0wQs&refer=home
http://www.bloomberg.com/apps/news?pid=20601110&sid=aCPfid8dnf4Q
To anonymous who thinks he agrees with Icon saying, "200 DMA is a gift to sell here." Sorry bro, Icon wouldn't be selling anything here except for a loss. Icon is ultra short. Got your poles reversed there, don't you? The 200 DMA is a gift to everyone who has invested 100% the inverse of Icon. How about a new poll, Snot. Now that we are at the 200 DMA, where will we go?
Icon wouldn't be selling anything here unless he was willing to take a H U G E loss! That dude has been so wrong for so long he's like the broken watch of this board- he's "correct" once every 12 hours which equates to he's been right 1 out of every 720 calls. Sounds about right!!! LOL
Here is the SP500:
http://prohardver.hu/dl/users/fless/090602_spx2.jpg
It's bullish, not bearish. We have a support, the old neckline, and the index is above the 200SMA, which is also support now.
Just because the S&P's 200dma fell low enough to finally intersect it's level doesn't mean "bullbullbull!"
Another month and the S&P's 200dma would have fallen to @ 800.
I don't care with the 200SMA, that's just a warning to bears. The point is the inverse head and shoulders.
If you think the action of the last 10 days has been bullish, then all I got to say is "sold to you!" It took a bond market dislocation to bring a 5% rally in the equities. That wont continue. It is assinine to think otherwise. You're darn tootin I'm short. As the DOW went over the 200dma, I just piled in. The DOW has no business being anywhere near 8750 at this time. The bond market has sent that message loud and clear. My target for the DOW is 8400. I'll reduce my short position back down to 20% as that target draws near.
Once again, what about UNG? If it gets back in the low $13s, is it a buy? I haven't pulled the trigger on it yet.
video on UNG
chart of UNG
UNG: I think that could be a forming triangle (perhaps early to say). If it is, then wait for the breakout.
And IMO don't watch UNG, because this is the source: http://futuresource.quote.com/charts/charts.jsp?s=NG&o=&a=D&z=800x550&d=LOW&b=CANDLE&st=MA(50%2C100%2C200)%3BVOI(1%2C1)%3B
It's different.
Iconoclast: GL!
I trade what I see not what I think.
Weeks ago when I bought FXI you called the top for the HSI (FXI) and you bought FXP (around 20 USD). Congratulations. :) What's the difference this time?
Calling tops or bottoms -> not a good business. Nobody knows where is the top or the bottom. I will short when the charts will tell me to short.
Hmmm. DOW closed at 8750, right where Icon says it doesn't belong.
A week later after Icon says the DOW has no business being at 8750, it is still hanging around there. Is it consolidating and getting ready for another run? Getting ready for a fall? Long, slow window dressing to finish off the quarter by big money that has been caught out of the rally? Uncertainty over the dollar and the bond market? I think we consolidate here a little longer and then move up to 9,000.
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