Still looking bearish. Outlook from yesterday could not have predicted today's action any better. Stock indices and currencies were weak, while energy (crude oil) was very strong.
The trend models are the same for tomorrow. Correlating asset valuation has the S&P dropping much lower. However, this is still a very much news driven market so be ready for volatility spikes.
Keeping the same playbook for now!
Interview with Kyle Bass (link via Zerohedge). Worth a listen!
Wednesday, November 16, 2011
Good read
http://www.zerohedge.com/news/jpmorgan-issue-cmbs-backed-defaulted-loans
I'll summarize the article for those who may not understand it: Creative greed. JP Morgan creating another derivative that carries too much risk yet because of it's complication, few will question it. Perhaps this newly created product will work for them as a successful investment, but that doesn't mean it's a good idea.
That's why it's best to manage risk on a smaller level and diversify your exposure. Over complicated finance has a history of getting messy.
I'll summarize the article for those who may not understand it: Creative greed. JP Morgan creating another derivative that carries too much risk yet because of it's complication, few will question it. Perhaps this newly created product will work for them as a successful investment, but that doesn't mean it's a good idea.
That's why it's best to manage risk on a smaller level and diversify your exposure. Over complicated finance has a history of getting messy.
Tuesday, November 15, 2011
Market Update for Wednesday, 11/16
Trend model updated. Like I said yesterday, a very mixed environment. Did not get a pullback, but did not get extreme bullishness either. There were plenty of opportunities to be a seller, and I think those opportunities will exist throughout this week.
Commodities continue to go up (pricing in of QE). Meanwhile, currencies are pulling back nicely after all the rumors last week. Using the trend sheet, it's easy to pick the winners/losers and position accordingly.
Looking longs: energy
Looking short: euro currencies
Commodities continue to go up (pricing in of QE). Meanwhile, currencies are pulling back nicely after all the rumors last week. Using the trend sheet, it's easy to pick the winners/losers and position accordingly.
Looking longs: energy
Looking short: euro currencies
Monday, November 14, 2011
Market Update for Tuesday, 11/14
So selling came in today as we are in a midst of a pullback. We are in a very mixed atmosphere as seen in the bullish/bearish sheet. We have not gained enough momentum to drop fast, but it appears we will be in pullback mode for a good part of this week. Of course, news out of Europe could change things, but if most of the rumors were bought up last week, we could see the sellers getting the upper hand this week.
Tech was very mixed today. AMZN and GOOG were very bullish but AAPL was weak. Overall, I will be looking more towards the short side.
So for now, looking short in the financials and S&P and Dow.
Tech was very mixed today. AMZN and GOOG were very bullish but AAPL was weak. Overall, I will be looking more towards the short side.
So for now, looking short in the financials and S&P and Dow.
Friday, November 11, 2011
Market Recap for the Week Friday, 11/11
The markets rallied today to close positive for the year. It's very typical to see big players push up the market on light volume holidays, especially Fridays. Now the headlines for investors can make them feel comfortable over the weekend; keep them invested. Good chance that selling will resume next week. The Nasdaq was much weaker in this rally, which is not a good thing. Tech is normally a leader. Also, copper was not leading, which can be a nice tell.
Looking at the trend model, there is a lot of uncertainity in the market. One can see this fundamentally through the huge gaps down by the Euro session followed by burst of rapid buying. This buying appears to be by some of the central banks and major market players to pump the market up. A lot of the run up this week was just caused by gunning a lot of the short's stops.
Also through the bullish/bearish trend model, one can see that commodities have been doing much better than the rest of the market. Crude oil and gold have continued to climb their way to their yearly highs. I believe I blogged or tweeted about their relative strength just about every day this week. Why are they doing better? A lot of investors are starting to price in another round of quantitative easing by the US Fed and the ECB. Quantitative easing is known for its inflation producing results, thus pushing commodities sensitive to such changes higher than the rest of the markets.
Still a lot of uncertainty out in the markets. Euro-zone risks can still provide a lot of shocks to the market. Be nimble out there.
Have a good weekend all!
Looking at the trend model, there is a lot of uncertainity in the market. One can see this fundamentally through the huge gaps down by the Euro session followed by burst of rapid buying. This buying appears to be by some of the central banks and major market players to pump the market up. A lot of the run up this week was just caused by gunning a lot of the short's stops.
Also through the bullish/bearish trend model, one can see that commodities have been doing much better than the rest of the market. Crude oil and gold have continued to climb their way to their yearly highs. I believe I blogged or tweeted about their relative strength just about every day this week. Why are they doing better? A lot of investors are starting to price in another round of quantitative easing by the US Fed and the ECB. Quantitative easing is known for its inflation producing results, thus pushing commodities sensitive to such changes higher than the rest of the markets.
Still a lot of uncertainty out in the markets. Euro-zone risks can still provide a lot of shocks to the market. Be nimble out there.
Have a good weekend all!
Trading Notes for Friday, 11/11
Today is Veteran's Day. Expecting light trading, generally a bullish bias. The Bullish/Bearish sheet is projecting energy to be the most bullish today. We should see some two way action, both buying and selling opportunities on an intra-day basis.
Look long in energy sectors.
Short in financial sector.
Be nimble today with general market vehicles and currencies.
Have a terrific weekend!
Look long in energy sectors.
Short in financial sector.
Be nimble today with general market vehicles and currencies.
Have a terrific weekend!
Wednesday, November 9, 2011
Trading Notes for Thursday, 11/10
Definitely pays to be nimble! Huge days down like today provided some nice swings in both directions.
High probability for more downside tomorrow. The Bullish/Bearish hedge fund model is now updated, daily signals on most stocks/sectors now pointing down. The size of today's pullback was a little surprising, but that is the trading environment we are in. The Euro news shocks can cause big drops overnight, giving a gap and go scenario.
Chances are that quantitative easing will continue causing the markets to rise and that this is just a pullback. Nonetheless, many longs were trapped and late coming shorts could keep the market down tomorrow. Momentum is down and there's no reason to fight it. The Euro zone is a mess, but like today, it is mainly old news causing the shocks. Italian bond spreads have been on a rise for quite a while.
Tomorrow, looking short financials and short Aussie and Euro currencies.
High probability for more downside tomorrow. The Bullish/Bearish hedge fund model is now updated, daily signals on most stocks/sectors now pointing down. The size of today's pullback was a little surprising, but that is the trading environment we are in. The Euro news shocks can cause big drops overnight, giving a gap and go scenario.
Chances are that quantitative easing will continue causing the markets to rise and that this is just a pullback. Nonetheless, many longs were trapped and late coming shorts could keep the market down tomorrow. Momentum is down and there's no reason to fight it. The Euro zone is a mess, but like today, it is mainly old news causing the shocks. Italian bond spreads have been on a rise for quite a while.
Tomorrow, looking short financials and short Aussie and Euro currencies.
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