Posts Tagged ‘bearish’

The Albert Edwards Exploration Diary, Day 423

Joshua M Brown found the latest entry in the diary of a frustrated bear in search of negative data showing the economy is headed for a downturn in The Albert Edwards Exploration Diary, Day 423. – Ilene 

Courtesy of Joshua M Brown, The Reformed Broker 

2 Decembre Anno Domini 2010

This morning I awoke to a cable from the nearest village informing me that Cyber Monday shopping stateside broke all kinds of records.  I’ve also been informed that PMIs from around the world are now in expansionary territory in unison.  Even jobs data is getting a tiny bit better, week by week…

But still I forge ahead.  I will scour the ends of the earth to find indicators that cast economic conditions in a negative light.  I will climb the highest peaks and plumb the depths of the Seven Seas in search of Depressionary evidence – no matter how obscure.  I will measure the second derivative change in Chinese eel sales on the wharves of Tianjin.  I will document the savings rates of retired sailors in Marseilles.  I will stop at nothing to make the numbers agree with my orneriness – this I swear to you, faithful client of Societe Generale.

Although my employer SocGen, the bankroller of my exploration, appears to be losing faith in my stubborn jeremiads, I must continue until I am proven correct.  I must plow on in my search for negative data until I am vindicated, even if global markets triple and quadruple before the next down cycle.

One day, the recovery will falter.  And on that day, I will be redeemed.

Yours in Perma-Bearishness,

Albert

Read Also:

Indicator Wars (FTAlphaville)

Help Me!  I’m Trapped in my Richard Russell Bunker!  (TRB)


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INVESTORS HAVEN’T BEEN THIS BULLISH SINCE 2007 MARKET PEAK

INVESTORS HAVEN’T BEEN THIS BULLISH SINCE 2007 MARKET PEAK

Courtesy of The Pragmatic Capitalist 

Being bearish is officially out of style. Sentiment readings have reached well beyond excessively bullish levels. The most recent Investor’s Intelligence survey showed another sharp increase in bullishness at 56.2%. This 7.6% surge in bullishness is the largest one week jump since April 2010.  At 56.2% this is also the highest reading since December 2007. The last time bullishness was even near these levels was April 28th, 2010 just days before the flash crash.

Last week’s AAII survey also showed extraordinarily high levels of bullishness at 57.6%.   This reading is literally off the charts and almost 10 points higher than bullish sentiment at the April highs.

Bespoke Investments highlighted how unusual it is to see both of these sentiment polls at such high levels:

“At a current level of 113.8%, the combined reading is the highest since mid-October 2007, which was shortly after the S&P 500 reached its all-time closing high of 1,565.15.  More recently, the last time combined bullish sentiment was above 100% was in April 2010.”

“Buy the dip” and “don’t fight the Fed” have become universal rally cries in recent weeks. It now appears as though no one believes the market can sustain a decline.  Unfortunately, the market generally frustrates the most people most of the time. If that saying rings true today the market is at a particularly risky juncture.

*AAII survey will be updated tomorrow after its latest release.

Update: AAII sentiment fell 17.6% this week to 40%.  According to Charles Rotblut this is the largest decline since January 2009. Like the current reading, that decline followed a multi month high in sentiment.  The market ultimately plunged until sentiment hit its low of 19% in March 2009. 


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Bullish….Bearish… or Neither

Bullish….Bearish… or Neither

Courtesy of Chris Kimble 

Am I Bullish, Bearish or Neither?

Choice “C”…Niether!

I am of the opinion, being Bullish or Bearish are emotional states of mind.  They are NOT STRATEGIES.  I believe that we should invest in each asset on its own individual merits/patterns, not based upon some global macro prediction.

Did I suggest to buy the 500 index (see post) and become “BULLISH” on 8/29 because the economy was fine? NO!  Bought the 500 Index due to these conditions…Bottom of channel support and a falling wedge and by the way, the fewest investors bullish since the March 2009 low.  NOTHING MORE!

Did I harvest the S&P 500 position and become “BEARISH” yesterday (see post) , after an 8% gain in three weeks, because something is bad about the economy? NO!  Harvested due to Fibonacci resistance at the top of a trading range. NOTHING MORE! 

Did I buy Silver a month ago (see post) because something is wrong with the dollar or that inflation is going to go wild or….NOPE!  I bought Silver on an upside breakout from a favorable pattern,  an ascending triangle . NOTHING MORE!

Why own Emerging Markets or Brazil right now?  Falling channel breakouts!  (See Post)  NOTHING MORE! 

Why own High Yield mutual funds?  A breakout of a flag pattern and above moving averages (see post) . NOTHING MORE!

Why BUY HOME BUILDERS XHB  (see post) when so many people are BEARISH on this industry?  Because of rising channel support plus a sizeable falling wedge after a 30% decline. NOTHING MORE!   (Current gain of over 12%!)

Will we buy the 500 index and other global markets  (see post)  on an upside break of these long-term falling channels? YES!!!

My goal is to try to provide solutions,  that will help investors “inflate portfolios, regardless of market direction by way of the Power of the Pattern!”    I will leave the Bullish or Bearish elements of this business to people much smarter than myself.

Chris


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Bullish….Bearish… or Neither

Chris, on being neitherish, i.e., how he views the markets. – Ilene 

Bullish….Bearish… or Neither

Courtesy of Chris Kimble 

Am I Bullish, Bearish or Neither?

Choice “C”…Niether!

I am of the opinion, being Bullish or Bearish are emotional states of mind.  They are NOT STRATEGIES.  I believe that we should invest in each asset on its own individual merits/patterns, not based upon some global macro prediction.

Did I suggest to buy the 500 index (see post) and become “BULLISH” on 8/29 because the economy was fine? NO!  Bought the 500 Index due to these conditions…Bottom of channel support and a falling wedge and by the way, the fewest investors bullish since the March 2009 low.  NOTHING MORE!

Did I harvest the S&P 500 position and become “BEARISH” yesterday (see post) , after an 8% gain in three weeks, because something is bad about the economy? NO!  Harvested due to Fibonacci resistance at the top of a trading range. NOTHING MORE! 

Did I buy Silver a month ago (see post) because something is wrong with the dollar or that inflation is going to go wild or….NOPE!  I bought Silver on an upside breakout from a favorable pattern,  an ascending triangle . NOTHING MORE!

Why own Emerging Markets or Brazil right now?  Falling channel breakouts!  (See Post)  NOTHING MORE! 

Why own High Yield mutual funds?  A breakout of a flag pattern and above moving averages (see post) . NOTHING MORE!

Why BUY HOME BUILDERS XHB  (see post) when so many people are BEARISH on this industry?  Because of rising channel support plus a sizeable falling wedge after a 30% decline. NOTHING MORE!   (Current gain of over 12%!)

Will we buy the 500 index and other global markets  (see post)  on an upside break of these long-term falling channels? YES!!!

My goal is to try to provide solutions,  that will help investors “inflate portfolios, regardless of market direction by way of the Power of the Pattern!”    I will leave the Bullish or Bearish elements of this business to people much smarter than myself.

Chris


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SENTIMENT TAKES A TURN FOR THE WORSE

SENTIMENT TAKES A TURN FOR THE WORSE

Courtesy of The Pragmatic Capitalist

Investor sentiment took a turn for the worse this week as most investors became increasingly bearish.  The Investor’s Intelligence survey showed a steep 5% decline in bullishness while the AAII‘s survey showed an even larger decline of 9.7%.   Although both surveys have declined dramatically in the last week neither is at extremes:

II2 SENTIMENT TAKES A TURN FOR THE WORSE

aaii3 SENTIMENT TAKES A TURN FOR THE WORSE

Charles Rotblut of AAII elaborated on the AAII results:

“Bullish sentiment, expectations that stock prices will rise over the next six months, fell 9.7 percentage points in the latest AAII Sentiment Survey. Bullish sentiment registered 30.1%, a six-week low. The historical average is 39%.

Neutral sentiment, expectations that stock prices will be essentially unchanged over the next six months, fell 2.7 percentage points to 27.4%. The historical average is 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 12.4 percentage points to 42.5%. This is a four-week high. The historical average is 30%.

Bearish sentiment has been firmly above its historical average for 14 out of the last 15 weeks. Sustained volatility in the market, continued economic uncertainty, a negative year-to-date return for the S&P 500 and low bond yields are all combining to fray individual investors’ nerves. Confidence is likely to remain fragile until investors have a sense that a bottom has been established for stock prices.”

Source: AAII & II 


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High Frequency Swanning – The Crash Camp Takes Over

High Frequency Swanning – The Crash Camp Takes Over

Red Bull Air Race Perth - Training Day

Courtesy of Joshua M. Brown, The Reformed Broker 

Here a Swan, there a Swan, everywhere a Black Swan…

Newsletter writers, hedge fund managers, journalists, bloggers, technicians, fundamental analysts, economists and strategists are joining the crash camp left and right.  Not the bear camp…the crash camp.

I’ve been running around Manhattan all day taking care of business, meeting clients etc.  After scanning today’s articles and blog posts, I can honestly say that I’ve never heard more chatter about an imminent market crash, all at once, in my life.  It’s like the May 6th Flash Crash got everyone in the mood to talk cataclysm all of a sudden.

I’m not one of those guys who takes everything as a contrarian signal.  I abhor knee-jerk contrarianism.  Samuel Lord once said "Do not choose to be wrong for the sake of being different," and I think that’s kind of apropos here.

As avowed contrarian Dougie Kass likes to remind us, the crowd usually outsmarts the remnant when herd mentality takes over.  So what is the herd hearing/ seeing?

* First of all, the macro guys are disturbed by the Euro Zone’s crisis and its ripple effect/ contagion risk.  This isn’t new but it is more pervasive.  And the possibility of a China collapse scares the hell out of almost everyone.

* The technicians and Dow Theorists are grossed out and have dusted off all the 1937 charts again.  Specifically, they are looking at the highly distinct pattern of a big drop (May 6th) followed by a failed rally (euro bailout day’s 4% gap open) followed by another fast sell-off. Richard Russell’s latest missive, in which he tells us that we won’t recognize America by year’s end, will make you want to kill yourself.

* Equity analysts are all pointing to year-over-year comps which will start getting harder now.  They may feel OK about the "E" but they’re shaky about the "P" – will the tax hikes and regulatory headwinds we now face really allow for a high-teens multiple on whatever the earnings turn out to be?

* Bond guys are freaking out about sovereign stuff, obviously.  We’ve transferred corporate risks onto government balance sheets with bailouts, the Piper still awaits his payment in many cases.

*Eddie Elfenbein posted the results of a CNBC poll yesterday in which 40% of respondents predicted a 50% haircut for…
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CHART OF THE DAY: THE SMALL INVESTOR HATES THIS RALLY

CHART OF THE DAY: THE SMALL INVESTOR HATES THIS RALLY

from dangerous mindsCourtesy of The Pragmatic Capitalist

As the most hated rally in the history of rallies continues, the small investor remains incredibly pessimistic about the sustainability of any recovery. Is this the contrarian of all contrarian signs or is this simply another case of the public seeing thru a stimulus based rally for what it really is?  David Rosenberg at Gluskin Sheff elaborates on the record lows in sentiment:

As Chart 1 illustrates, a record-low 6.2% of Americans buy into the recovery story  and it looks as if this picture is already in the process of double-dipping.  Rarely, if ever, has the perception gap between Wall Street and Main Street been so wide as it is today.

sent CHART OF THE DAY: THE SMALL INVESTOR HATES THIS RALLY

Source: Gluskin Sheff 


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Bears

Robert Prechter’s Thoughts on Valuation and Sentiment

Courtesy of Adam Sharp at Bearish News 

Nice interview via CNBC. Mr. Elliot Wave talks about current extreme bullish sentiment and what it means, among other things.

*****

Don’t let the bears eat you while you’re sleeping! (I know, you’re not worried now.)

THE SLEEPING BEAR

Courtesy of Jason Louv at Dangerous Minds 

image

This is perhaps the greatest camping accessory ever made. A sleeping bag that looks like a bear—perfect for scaring away bears that show up in the night… unless they fall in love and try to get all up in that shit….?

This is a greatest sleeping bag. You can wear it to sleep when you go camping. It is safe that no bear will attack your camp and eat you? Or you just want to wear it, and then scare your friend when he(she) wake up in the morning. (a good idea!) Well made and Cool! By artist Eiko Ishizawa.

(The Sleeping Bear)

(Thanks, @leashless!) 


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SMALL SPECULATORS REMAIN BEARISH

SMALL SPECULATORS REMAIN BEARISH

Black bear, Waterton Lakes National Park, Alberta, Canada

Courtesy of The Pragmatic Capitalist 

The latest data from the CFTC shows continued bearishness from small speculators.  Small speculators have been skeptical of the rally since its inception and remain so.  More importantly, they have been wrong.  This cruel market gave them a taste of victory over the last few weeks before snatching back half of the losses.   Despite my cautious tone since S&P 1120, I fully disagree with the small speculators.  You cannot be short equities in the face of the strong trends we continue to see.   Earnings are likely to continue to be robust, we are approaching another stimulus based spring real estate season and stimulus in general remains accommodative.  Small speculators as a contrarian indicator is likely to continue working.

COT SMALL SPECULATORS REMAIN BEARISH

 

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David’s Five Keys to Identifying a Fundamental Day Trade

In the Oxen Group section, David recommends a couple day-trades, usually in the morning, often a stock or ETF to buy, and a stock or ETF to sell short. David selects his trading candidates based on his “fundamental day-trade system,” and his analysis of the technical condition of the market. He attempts to choose stocks and ETFs that are likely to move 3-5% during the day, and also to open and close the positions at optimal times.

David selects trades by first examining five key sources of information to help him find "high probability trades." After selecting the trades, he applies several basic trading rules. He has an excellent track record, which is posted in the Oxen Group section and updated every few weeks. Previously, David wrote about the first two of his fundamental keys. Here, David writes about all five of the most important factors he looks at. – Ilene 

The Five Keys to Identifying a Fundamental Day Trade

By David at Phil’s Stock World 

Identifying the Fundamentals

Stocks move under the influence various factors that we can use to identify stocks that are likely to move 3-5% in a single day. Even the best technicals seldom give you 5% upward (or downward) movements intraday alone, but combined with fundamental factors, we can find stocks that are likely to make these large daily moves.

To begin to seek that perfect stock or ETF, we first need to look for something that can propel a stock or, in the case ETFs, the represented sector. This 3-5% movement is not from the previous day’s close, but between the market’s open and close. We want to identify a stock that can be bought sometime in the morning to give us that significant movement by the end of the day. The first type of information that is prone to easily move stocks is earnings.

1. Earnings
Briefcase Full of $100 Bills

There are multiple ways to play a company’s earnings. One of the most effective ways to invest based on earnings is after a company has already announced their earnings. We are looking for earnings that were surprising, especially ones that say something about a sector.

For example, if one company announces positive earnings because it had a large profit from a lawsuit, this information does not tell us much about


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Zero Hedge

MaRaTHoN MeNSCH-auBLe

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

...

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Phil's Favorites

5 Things To Ponder: Independence Day Reading

Courtesy of Lance Roberts via STA Wealth Management

This weekend's reading list is a smattering of articles to enjoy between your favorite beverage, grilled meat and really fattening desert. Just remember to go back to the gym on Monday.

1) Grantham: Stocks Will Continue Upward Until The Election by Justin Kermond via Advisor Perspectives

"Jeremy Grantham says equity valuations are heading toward the "two-sigma" level that is the requisite threshold for a true bubble. At some point – which is not imminent – he said a "trigger" will precipitate the reversion back to mean levels. The market will continue to deliver positive returns until the next e...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

China's slowdown is bad news for the world's big industrial exporters (Business Insider)

China's slowing economy is a serious concern for the economies of the nearly 50 nations that count China as their top export destination.

According to economists at UBS, not only will it impact the countries where the goods are coming from, but individual industries will also be hit harder than others.

Brett Arends's ROI: Why I’d vote ‘no’ ...



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Insider Scoop

Why CarMax Is A 'Favorite' Stock At Oppenheimer

Courtesy of Benzinga.

Related KMX KeyBanc Foresees Consolidation Among Auto Retailers CarMax Shares Sputter Following Lower Revenues

In a report published Friday, Oppenheimer analyst Brian Nagel maintained an Outperform rating on CarMax, Inc (NYSE: ...



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Chart School

Chinese SSEC rally with Wyckoff Logic

Courtesy of Read the Ticker.

Supply and demand is the leading force within stock prices, you must know the tea leaves. Richard Wyckoff logic is the only known method of understanding supply and demand with the stock market.Readtheticker.com provides all the tools you need to be a Wyckoff master analyst.More from RTT Tv

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party ima...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Shanghai index creates historic reversal pattern like 2007

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Much of the attention around the world seems to be revolving around a small country called Greece. What about the most populated country in the world (China), any key messages coming from there of late?

Well another Month, Quarter and Half a year are in the books. With this in mind I wanted to look at Monthly action of the hottest stock market in the world, the Shanghai Index. Above looks at the Shanghai index over the past 25-years. The 100%+ rally over the past year has pushed the Shanghai index up to its 23% Fibonacci ratio and a long-term resistance line, that has been in play for 25-years at (1) above.

As the Shanghai index was hitting this...



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OpTrader

Swing trading portfolio - week of June 29th., 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

BitGold Now Available in US! Why BitGold?

Courtesy of Mish.

BitGold USA

Effective today, BitGold Announces Platform Launch in the United States.

BitGold, a platform for savings and payments in gold, is pleased to announce the launch of the BitGold platform for residents of the US and US territories. As of today, US residents can sign up on the BitGold platform and buy, sell, or redeem gold using BitGold’s Aurum payment and settlement technology. US residents will also have access to the BitGold mobile app and a prepaid card when these features launch over the coming weeks. Send and receive gold payment features are not initially available in the US.

About BitGold

...



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Sabrient

Sector Detector: Bulls under the gun to muster troops, while bears lie in wait

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

Two weeks ago, bulls seemed ready to push stocks higher as long-standing support reliably kicked in. But with just one full week to go before the Independence Day holiday week arrives, we will see if bulls can muster some reinforcements and make another run at the May highs. Small caps and NASDAQ are already there, but it is questionable whether those segments can drag along the broader market. To be sure, there is plenty of potential fuel floating around in the form of a friendly Fed and abundant global liquidity seeking the safety and strength of US stocks and bonds. While the technical picture has glimmers of strength, summer bears lie in wait.

In this weekly ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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