Got long FAZ (3X Bear Financials ETF) Thursday from $5. Had a nice day today. I’m looking to hold this position about a month, or whenever I feel Wave B down is nearing an end.
I’ll be paying close attention to wave structure, but also general market sentiment, which I feel is become increasingly difficult to read. There is a huge split between traders and the general public. Traders don’t believe in this rally and are overall still very bearish, which is why I think this ABC correction has legs into the end of the year. The general public is much easier to fool, switching to the rosy bull camp after a couple stable months. But they are less important with less influence on the market. Just because Joe Shmo is bullish again does not mean the market is heading to new lows immediately. There are still too many traders that think Joe Shmo is about to lose his shirt, or whatever’s left of it.
More useless observations based on some more lines drawn on S&P weekly chart.
- Prior to Mar 9, the market was down 8 out of 9 weeks
- From Mar 9, it is up for 8 out of 9 weeks to close at or near where it was 18 weeks ago. How is that for symmetry?
- Blue rising trendline and 941 are converging, neckline for a POTENTIAL inverse H&S all are converging.
- What next? potential sell off to 820 and then a bounce.
- Here is the chart:
Monday, May 11, 2009
Economic
None Seen
Events
7:30pm Fed Chairman Bernanke discusses the financial crisis in Georgia. Trades Ex-dividend: WYE $0.30, XOM $0.42, ED $0.59, XLNX $0.14, ETR $0.75, ZION $0.04.
Earnings
Before the Open: ALD, ABK, AOB, BPZ, CRZO, CFSG, CCO, DISH, SATS, ENER, ENG, FNM, FRPT, FSIN, GSI, GLG, GTXI, HI, HWCC, NSIT, IPCS, KG, MCCC, NTE, ORA, PCAP, PETS, PLA, RRI, ROSE, SLW, SUG, STRL, SWSI, VM, WCRX, WCG. After the Close: JOBS, ARNA, CPE, CTRP, DTSI, FLR, GXP, HPT, IPAR, KNXA, LDK, ME, MDR, MR, NNI, NUAN, PEC, QSFT, RAX, SB, SGK, SIMO, STEC, TTEC, TWTC, VIMC, ZOLT.
[From the perspective of bears, of course!]
[Updated with NDX chart]
For eight weeks, it seemed like
- all bad news is either “priced in” or good news
- all good news is great news
- economy has “hit the bottom,” and the recovery is just a street block away
- gold is bad, dollar is good, stocks are on a tear, treasuries are strong
Update 6:50 PM: Everybody on CNBC Fast Money show are Bullish. Jeff is cautious, but bullish. Seems like everybody who was bearish on stocktock has either given up or bullish.
Update: 4:00 PM: Rising trend line resistance held at the close. Even slightly higher close tomorrow will also keep the resistance intact, because the trend line is rising. Strange action in financials during last hour of trading – huge swings up and down. That usually happens when a major reversal is about to happen.
(now updated)
Darned if I know!
Things that are compelling for (at least short-term) bear case:
Monday, May 04, 2009
Economic
10:00am March Pending Home Sales m/m (last 2.1%), March Construction Spending m/m (last -0.9%)
Events
12:30pm Fed’s Hoenig speaks on the economic crisis in New York. 2:00pm Fed’s Lacker speaks on the economy in Charlottesville, VA. American Gas Assn. Financial Forum. Offshore Technology Conference. Financial Executives International Summit. Trades Ex-dividend: CYN $0.10, EOC $0.819, LINE $0.63, RGA $0.09.
Monday, April 27, 2009
Economic
1:00pm Treasury’s 2-yr note auction
Events
10:00am AXP shareholder’s meeting. Trades Ex-dividend: ATR $0.15, AZ $0.324.
Monday, April 20, 2009
Economic
10:00am March Leading Indicators (last -0.4%)
11:00am Treasury’s 5-year announcement
Events
9:00am Fed’s Evans speaks in Chicago. 7:30pm Fed’s Kohn speaks on economic outlook in Delaware. American Association for Cancer Research Annual Meeting. CIBC Energy Conference. Credit Suisse Private Equity Conference. Merrill Lynch/BoA European Oils Conference. RDEA Analyst meeting. Trades Ex-dividend: CVS $0.076, APA $0.15.
