by phil - December 9th, 2013 8:14 am
That's what Richard Gere said to Lou Gosset in "An Officer and a Gentleman" and that's what the markets are saying to us as the Fed attempts to force them into a no-lose situation in which there is literally nowhere else to put your money other than equities. The bank won't pay you interest, inflation erodes your cash, bonds pay next to nothing and margin interest has never been lower – why not play equities – you can't lose?
Or can you? As Dave Fry notes in his Dow chart, it's a micro-managed environment for equities and everyone knows "you can't fight the Fed" and bears can certainly attest to that this year as we've had a pretty relentless 3,000-point climb in the Dow. We did run into a spot of trouble in the Summer, but that was fixed in October as GS, NKE and V were added to change the mix, which helped to goose the index another 1,000 points.
It doesn't matter how the Dow gained 23% this year, as long as they get to print that fact on the brochures, right? Just like it didn't matter how Bitcoin came to print such a bullish picture as it rocketed up from $500 to $1,200, rewarding all dip buyers along the way. These things always work out fantastically well – until they don't!
One of the hardest things to teach traders is the value of PRESEVING wealth, as opposed to just making more of it. If the market is going to go up and up and up in 2014, then we have hundreds of ways to make much, much more than 23%. I'm just putting together a list of those ideas for our Members and, just like the beginning of 2013, when I had 3 bullish picks on January 5th, we can start 2014 off with some bullish selections as well – especially since we have such lovely support levels (16,000 on the Dow, 1,800 on the S&P, 4,000 on the Nasdaq, 10,000 on the NYSE and 1,100 on the Russell) to let us know when it will be time to get out.
by SWW - December 8th, 2013 6:33 am
Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.
by ilene - December 7th, 2013 6:11 pm
Courtesy of John Mauldin, Thoughts from the Frontline
I'm not certain how many interviews I've done over the last decade. Hundreds? I know it is a lot. There are some interviewers who can somehow tease out what you really have in you. Tom Keene at Bloomberg, for instance, forces you to bring your A game, at whatever level you play. He brings it out of you. You know that he is smarter than you will ever be and that you should really be asking him the questions. Except that you're not smart enough to ask the questions. I have to confess that every time I walk into the room with Tom I'm a little intimidated. I try never to show it, somewhat like the new kid on the block trying to put on a brave face, but inside I keep looking for the exit doors just in case I throw up all over myself. At the end of the day I'm still a small-town country boy from Bridgeport, Texas, trying to figure out how the big city works.
And then there's Steve Forbes. If I've done hundreds of interviews, then Steve has done many thousands, on the presidential campaign trail with the best of the best, and gods did he learn the craft. I've done multiple interviews with Steve, and every time I sit down with him I feel that I'm with my best friend. Maybe it's because we have a ton of shared values and I have read and admired him for years. I truly think he would've made a great president in the mold of Ronald Reagan, but for whatever reason New Hampshire did not agree. As I think even Steve will admit, while he may have a philosophical mind meld with Reagan, the Gipper had some small genetic extra, call it what you will.
But for whatever reason, Steve seems to bring out the passion in me. When I think about what central bank policies are doing to savers and investors, how we are screwing around with the pension system, circumventing rational market expectations because of an untested economic theory held by a relatively small number of academics, I get a little exercised. And Steve gives me the freedom to do it.
by phil - December 7th, 2013 8:23 am
Up and up the markets go, where they stop, no one knows!
Well, we do know where they SHOULD stop, and that's here. In fact, to be very clear – WE ARE SHORT THE MARKET HERE – many of our Members have gone to cash and our short-term trades are BEARISH, looking for a correction back to that 22-week moving average that you can see as a "gap too large" on Dave Fry's Nasdaq chart.
BUT (and it's a Big But) just like we hedge to the downside on the way up (in case we're wrong), we should hedge to the upside too – just in case that correction never comes. That's why we regularly run our series of "5 Trade Ideas that can Make 500% in a Rising Market" – those are the kind of high-leverage hedges every bear should have in their portfolio and, yesterday, in our Member Chat Room, I reviewed our most recent 5 trade ideas, from our pre-Thanksgiving post:
by Option Review - December 6th, 2013 5:13 pm
by phil - December 6th, 2013 8:37 am
The Futures are bouncing already (8am).
We'll see how this pans out but it's been a crappy week and we'll yet again be watching our strong and weak bounce lines on the Big Chart, which I laid out for our Members in Wednesday's Chat, which prevented us from falling for the weak bounce that day and yesterday's lame pump job at the open – both of which ended up failing.
Today, we're back to the weak bounce lines in the Futures, kicked off by a weak Dollar (80.35), which will go up fast (and take down the markets) if more than 250,000 jobs are added – so good news likely to be bad news again today. The bounce lines we're going to be watching are:
- Dow 15,910 (weak) and 15,970 (strong)
- S&P 1,794 (weak) and 1,800 (strong)
- Nas 4,030 (weak) and 4,040 (strong).
- NYSE 10,060 (weak) and 10,100 (strong).
- RUT 1,125 (weak) and 1,130 (strong).
As you can see from our Big Chart, we have some serious tests at 4,040 on the Nasdaq, 10,000 on the NYSE and 1,120 on the Russell – all of which we should be above this morning. Let's say that failing 2 of 3 of those lines would be a very bearish indicator and the quick money can be made by shorting the Nasdaq, who haven't come down much, at 3,490 in the Futures (/NQ) or below the $85.50 line on QQQ, where we should be able to buy the Dec $84 puts for .50 or less and a $1 move down in the Qs (1.2%) to approximately 3,990, should net us a quck 50% gain.
We had a lot of excitement in the oil pits yesterday with oil rising all the way to $98 at 10am but it was rejected there and back to as low as $97.20, before settling between $97.25 and $97.50, where we were able to play for nickels and dimes since.
As promised, I sent out a tweet letting our followers know that we were shoring oil at 1:42 at $97.76 and that price held through…