Went long the first of this month (see post) due to the pattern in the Euro/Yen, which often takes an early leadership role for equities. Shared on 8/29, a good short-term rally should take place. So far up 7% in 17 days. Now what?
Keep stops tight…Not impressed with the action right here!
Bob,
I’m going to confess to being a trader hoping that I can clip those sorts of trades before they put me on my knees. I don’t like this market, and it has left a sour taste in my mouth ever since it rallied with such looming issues as to where we’re going as a country. However, despite my uneasiness, the market is always right, and I only try to put my personal feelings aside and be profitable instead of being “right” by my own marks and misgivings. Everything you’ve said is right, and no one can refute that, but at the end of the day, I’m not concerned with being “right”, but instead being profitable. And, of course, tip-toeing around the next disaster when/if that comes.
William,
Look back at earnings expectations for two of your picks, MSFT & INTC, in 2000.
INTC peaked in late summer, a few months before the recession. If their share price quintuples, it will be right about where it was then, ten years ago.
Well if you can’t pull the trigger on a trade when they’re raising sales expectations, then I’m not sure when you’ll ever do it.
In my opinion, the only way you’ll be able to time this market ahead of a dramatic sell off is by analyzing credit spreads. If we’re going to get a meaningful sell off, it’s going to start there due to another systemic shock. Besides that, everything else is just a noise within the trading range.
William, I remember when CAT was saying similar things in spring 2008. I think if you look you’ll see that’s when they peaked. Several months into a recession.
Earnings usually peak just before recessions, it’s not much of a tell.
The question is, how will they be doing in 6-12 months?
Hey Bob,
In my opinion, everyone that has an opinion is going to get their 15 minutes of air time and say that European debt is bad and we shouldn’t forget, but when CAT comes out (like today) and says global sales are accelerating, or when RIMM blows away earnings, I feel confident about being long this market. At the end of the day, we pay for earnings as investors, and those don’t look to disappoint just yet. If RIMM, noted as the crappiest smart phone producer, can blow away earnings, what does that say about results for MSFT, GOOG, Apple, INTC, etc…?
I see the OCT Vix 40 calls are getting some big bids the last day or two. This last happened in late April. Will be interesting to see what happens with these bets.
Rosenberg has great info. Thanks for sharing!
Anyone checked the spread between the VXN (not the VIX) and the NDX 100 recently and compared it to the spread as of 4/22?
NDX/Techs have played a leadership role…Complacency? Keep an eye on the NDX/VXN spread!
I get the feeling a lot of these trades are all short-term momentum players going back and forth. The news has been too bad to draw new money into the market and not bad enough to force the big holders out.
I think it’s basically Chris going counter to the AAII members. 😉
From David Rosenberg today:
“The American Association of Individual Investors survey showed that the bull share jumped seven points last week, to 50.9% (the long run average is 39%) and the bear share plunged seven points, to 24.3 (long run average is 30%). These are negative contrary signals for the equity market — as is the sub-22 reading on the VIX index. Complacency, yet again, is the order of the day.”