Posts Tagged ‘BULL MARKET’

Monday Market Movement – Do We Ever Go Down?

breadth

We all go down for a piece of the moment
Watch another burn to the death to the core
And the roadshow thrills pack the freaks and the phonies
Sing: now is now, yeah! – Rob Zombie 

There is just no way to win betting against this market!  

Well, actually, there is one way and that's betting that each pop is nonsense and tends to have a subsequent pullback intra-day but, long-term, the cumulative effect of all that low-volume pumping has been a rousing success, to say the least.  

As you can see from Andy Thrasher's S&P chart, there has been some amazing underlying deterioration since the July 4th weekend with the Advance/Decline line falling back to trend and stocks above their 200-Day Moving Average dropping 15% in 3 weeks.  Stocks above the 200 DMA is a fantastic leading indicator for downside move – ignore it at your own risk. 

TNXPeople are panicking into bonds, dropping the 10-Year Yield 20%, from 3.1% to 2.45% this year but it doesn't matter because Central Banksters are pumping SO MUCH MONEY into the Global Markets that there's enough to buy all asset classes simultaneously – something that is unprecedented in Financial History – what could go wrong?

Well, one thing that could go wrong is you putting your money into Mutual Funds.  As it turns out, in an S&P study of actively managed Mutual Funds, only 2 (two) out of 2,862 actually beat the S&P over ANY of the fund's lifetimes (limited to 12 months or longer).  

That's even worse than the average performace of hedge funds, which only averaged a 0.59% annual loss when compared to just putting your money directly into the S&P.

 This dovetails with a conversation we were having this weekend in our Member Chat Room, where I identified 4 trade ideas for a $50,000 Portfolio that only used 1/4 of the buying power to generate $365,512 in projected profits over the next 15 years using CONSERVATIVE options strategies designed to MATCH the S&P, not beat it.…
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Too High Tuesday? 10 Bullish Trade Ideas that Made Over 1,200%

SPY 5 MINUTEThis is ridiculous.

As noted on Dave Fry's chart, the S&P made a new record high with narrow participation and essentially all of the gains were one big move in the Futures to reprice the index.  I said yesterday we have been getting 50% of the day's volumes in the close and yesterday was no different and that closing volume is all dumping into the ETF, IRA and 401K suckers that are forced to buy.  

We took a couple of big bats against the Dow's move up yesterday, adding a DIA put at $166.80 (see yesterday's Member Chat for details) as well as going long on DXD at $26.20 – both with leveraged options plays, of course.  

SPX WEEKLY

We still have plenty of bullish trades to protect but, when we bein to cash out our winners and start buying short plays on the index – you can tell the winds are changing.  Our 500% trade on DDM from Thanksgiving was scheduled to top out in April anyway – and we sold in May to go away.  

That trade was one of our "10 Trade Ideas That Can Make (and some have already made) 500% in a Rising Market" and I had just as much trouble convincing people to go long in November as I'm having convincing people it's time to cash out in May.  

Not all the trades are done, but a quick summary of those positions is:

  • ABX 2015 $13/18 bull call spread at $2.80, selling 2015 $15 puts for $2.05 for net .75, now $2.35 – up 213%
  • 8 QQQ Jan 2014 $75/80 bull call spreads for $3 ($2,400), selling 1 ISRG 2015 $300 put for $23.50 ($2,350) for net $50, now net $2,600 - up 5,100%


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The Dark Side of Deficits

The Dark Side of Deficits

Bear and bull market collage

Courtesy of John Mauldin at Thoughts from the Frontline

Secular Bull and Bear Markets 
It’s Not the (Stupid) Economy 
The Consequences of a Credit Crisis 
The Dark Side of Deficits 
LA, Europe, Kansas City, and Houston

In the pre-crisis days, I used to write about things like P/E ratios, secular bull and bear markets, valuations, and all of the things we used to think about in the Old Normal. But what about those topics as we begin our trip through the New Normal? It’s time to reconvene class and think through what might change and what will remain the same. I think this will be a fun read – and let me tip my hand. I come out on the side of a new secular bull that gets us back to trend – but not just yet. The New Normal has to have its turn first. (Note: this will print out longer than usual, as there are a lot of charts.)

And speaking of first, I once again need some help from readers. I will be in "jail" next week for the Muscular Dystrophy Society. I need you to help bail me out. You can go to https://www.joinmda.org/downtowndallas2010/johnm and make a donation to help kids and families who really need help in these difficult times, and also help sponsor research that will eventually cure this disease. If you follow the link, you can see a cute video – and then make your donation!

I thank you and I am sure Jerry’s kids thank you too!

Secular Bull and Bear Markets

Market analysts (of which I am a minor variety) talk all the time about secular bull and bear cycles. I argued in this column in 2002 (and later in Bull’s Eye Investing) that most market analysts use the wrong metric for analyzing bull and bear cycles.

(For the record, even though I am talking about the US stock market, the principles apply to most markets everywhere. We are all human.)

CANYONLANDS, UT - OCTOBER 25:  The full moon rises over the White Rim Trail with the La Salle Mountains as a backdrop on October 25, 2007 in Canyonlands National Park, Utah.  (Photo by Doug Pensinger/Getty Images)

"Cycles" are defined as events that repeat in a sequence. For there to be a cycle, some condition or situation must recur over a period of time. We are able to observe a wide variety of cycles in our lives: patterns in the weather, the moon, radio waves, etc.…
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Things We Lost In The Fire

Things We Lost In The Fire

Courtesy of Joshua M. Brown, The Reformed Broker 

MOSCOW, RUSSIA. JUNE 7, 2010. Salesmen await fire fighters as Kuntsevo-2 construction marketplace in Moscow is ablaze. (Photo ITAR-TASS / Dmitry Machin) Photo via Newscom

Over the last month, US markets have been burned to a crisp.  Blame it on Europe, blame it on a softening of our own recovery data, blame it on the end of earnings season, blame it on the end of quantitative easing, blame it on the Gulf spill, blame it on the engineered cool-off in China.

Is it too soon to eulogize the March 2009 – April 2010 bull market, a 78% performer that even the most bullish never really believed in the entire way up?  Depends on which support lines and moving averages you happen to be fixated on at the moment.

But it is certainly not too early to lament the Things We Lost In The Fire - the idiosyncrasies of the Impossible Rally that we may have lost for good.  These include:

Apple as the Michael Jordan of the NASDSAQ- Steve Jobs had us from hello, we clamored around the television for each product release and conference, and Mr. Jobs did not disappoint.  Nor did Apple stock, which seemed to go up 3 to 5 points a day for what seemed like an endless stretch of time.  It was a reminder to stockpickers everywhere that ETFs didn’t control everything- that you could get one right on research.  The release of the iPad and the move toward shattering the $300 per share mark epitomized the release of our pent-up optimism and will always be remembered as a special time in market history.

Cree Research, Green Mountain Coffee and Baidu- The hottest of hot…
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A BEAR MARKET OR JUST A CORRECTION?

A BEAR MARKET OR JUST A CORRECTION?

Courtesy of The Pragmatic Capitalist 

Bull in bear costume

Readers have likely noted my decidedly more bearish tone of late.  Coming into 2010 I was fairly optimistic about the equity markets and the economy in the first half of the year with expectations of a second half slow-down.   The market appeared likely to unfold in exactly that manner, but the developments in China and Greece looked like game changers to me as the global turmoil unfolded a bit faster than I expected.  So much so that I initiated my first net short position in over two years as the S&P surged to 1200.  Just a few short weeks later the market was literally crashing.

But as the market continues to decline we have to ask ourselves if fear isn’t getting a bit ahead of fundamentals?  Are investors too bearish and pricing in too much negativity or are they not bearish enough?  In other words, is this a new bear market or this just a correction? This was the question David Rosenberg asked himself in last Thursday’s missive:

“Well, so far the S&P 500 is down nearly 10% from the highs, so this is indeed a correction thus far but more often than not, declines like these morph into something more severe — even when we are in durable economic expansion phases like 1987 and 1998. This recovery is tentative, at best. But the numbers we are looking at is a 50% retracement of the March 2009-April 2010 runup, which means 943 on the S&P 500 and the reality that lows in the market, whether they be interim or more fundamental, tend to occur with the index 20% below the 200-day moving average, which at this stage would be 879. So at least we have a defined range of when to begin to put money to work. A break below that range would indicate that Mr. Market is sniffing out a double-dip recession, not just a visible slowing.

The ECRI leading index is down to a 47-week low, which is pointing towards much softer growth ahead and the Shanghai equity index is off nearly 30% and perhaps giving us a reading on global growth prospects. The one thing we do know is that the last time China was down 30%, this was a train hardly worth boarding in terms of how to be positioned


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Dow Jones Masochism

Dow Jones Masochism

Courtesy of Joshua M. Brown, The Reformed Broker 

Female devil holding whip, flames in background

Brett Arends has a story up over at WSJ that makes the case for more pain – that the March ’09 bottom wasn’t quite painful enough to have been THE bottom for this cycle.  The article’s an amusement park for shorts, but does a nice job categorizing the items that could lead to another brutal beating for stocks.

The slide that began in 1969 didn’t end until 1982. The slump after 1929 didn’t give way until the late 1940s. Japan’s gloom is still with us.

In general, the bigger the bull-market boom, the bigger and nastier the bear market that follows. The bull market of the ’80s and ’90s was the biggest on record. So expect the bear that follows to be ugly and tenacious.

And for some perspective, Lisa Haney throws in this Dow Jones Industrial Average bear market guide…

The 2007-2009 plunge is the worst on record, but according to some, not nearly damaging enough considering the run-up in asset prices that preceeded it.

Source:

May’s Big Selloff Could Be Just The Beginning (WSJ) 


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TECHNICAL PERSPECTIVE: WHERE’S THE VOLUME?

TECHNICAL PERSPECTIVE: WHERE’S THE VOLUME?

Courtesy of The Pragmatic Capitalist 

By Decision Point:

FROM A SUBSCRIBER: Hi Carl. I’ve never written but have followed you for many years (since AOL) and have learned more about reading the market from you than any other source. You have such a clear and common sense view that it is really refreshing. I love the new daily blogs and am so glad Erin is learning the ropes. I would write her directly, but don’t see her email address anywhere. I rarely disagree with what is said, but in this case I am very suspicious of a bullish interpretation of today’s (May 27) rally, mostly due to the low volume. It seems more like a bear market, short covering rally to me. Was wondering what you think of the volume issue. Thanks for any comments. 

Thanks for the compliment!

I try not to engage in discussions in order to reconcile differences of opinion about the market, because, even if I manage to convince my “opponent”, it doesn’t mean I’ll be right about the outcome. We try to be methodical in our analysis and clear in presenting our conclusions.

After several days of sloppy, downward-sliding price action, on Thursday the market finally had the first day of what could be a full rebound from very oversold conditions. Sloppy action in oversold conditions signals a very dangerous situation, one from which a crash can result, and on Thursday we breathed our first conditional sigh of relief.

While we have emphasized the danger involved “buying into weakness” with oversold markets, we have believed that the odds favor an end to the correction because we are technically in a long-term bull market, and corrections rarely morph into bear markets in those conditions.

It is true that volume was pathetic, but volume has been unimpressive throughout this bull market, and for Thursday there is also the issue of the upcoming Memorial Day weekend. People are leaving town early.

We can also see a clear descending wedge pattern, a bullish pattern which has a high reliability for resolving to the upside.

Chart

Most important is our philosophy that price is primary, breadth and volume are secondary. Not that we don’t look at breadth and volume, but they need to be subjectively interpreted based upon the bull or bear bias of the market. As a result, none of our mechanical timing…
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SP Futures Daily Chart and a Brief Note Ahead of the Comex Option Expiry.

SP Futures Daily Chart and a Brief Note Ahead of the Comex Option Expiry.

Courtesy of JESSE’S CAFÉ AMÉRICAIN

The SP is continuing its bounce off the long term trendline for this leg of the bull market in stocks, the result of the reflation effort by the Fed.

Stocks showed some remarkably artificial action last week that was a bit hard to miss.

Similarly, gold and silver continue to rebound from the blatant hammering they took last week as we approach the option expiration at the COMEX. A fellow that trades there said last week that the price would be back over 1200 by Wednesday, and that the option buyers ‘were just asking for it.’

Perhaps they were, but it is the job of the CFTC and the US government to make sure that they don’t "get it," that is, get cheated, at least not that easily, through the obvious manipulation of price which we have seen in the last week. It would be as if the Nevada Gaming Commission allowed false dealing and marked decks to facilitate the casinos cheating their customers, who were dismissed as greedy gamblers anyway. Why this argument is allowed in the financial markets is beyond me.

The sellers are easily identified, as are the sellers of the calls, and the large short interests. This is not rocket science. It is a failure to do one’s job, and uphold their sworn oaths to protect the public. You can judge their motives.

"The government is the potent omnipresent teacher. For good or ill it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that the end justifies the means — to declare that the government may commit crimes — would bring terrible retribution."

Supreme Court Justice Louis Brandeis


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ROSENBERG: 400 POINT RALLIES ARE A REASON TO BE BEARISH

ROSENBERG: 400 POINT RALLIES ARE A REASON TO BE BEARISH

Two four-month-old polar bear cubs walk in an open-air cage on their first day at the Royev Ruchey Zoo in the Siberian city of Krasnoyarsk

Courtesy of The Pragmatic Capitalist 

Excellent note this afternoon from the always cheerful David Rosenberg.  Mr. Rosenberg notes that 400 point rallies and increased volatility are not the signs of a bull market, but rather a bear market!   Rosenberg writes:

“The obvious question is: how can the bull market possibly be over considering that we enjoyed that amazing 405-point rally on the Dow just three days ago (Monday, May 10)?  Wasn’t that an exclamation mark that the bull is alive and well?

Far from it.  There have been no fewer than 16 such rallies of 400 points or more in the past, and 12 of them occurred during the brutal burst of the credit bubble and the other four took place around the tech wreck a decade ago.  See Chart 2 below.

In other words, the most valuable information contained in last week’s intense volatility, underscored by the 400-plus point bounce in the Dow, is that it’s time to take chips off the table and brace for the breakdown. “

GS1 ROSENBERG: 400 POINT RALLIES ARE A REASON TO BE BEARISH

While traders have become very euphoric about the prospects of the recovery and the continuation of the bull market now that government’s around the world have saved the day (once again!) Rosenberg notes that huge spikes like the recent move in the VIX are not bullish signs at all, but rather preceded major market downturns:

gs2 ROSENBERG: 400 POINT RALLIES ARE A REASON TO BE BEARISH

Buckle up boys and girls.  Last Thursday might have only been an appetizer.

Source: Gluskin Sheff 

 


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More On Yesterday’s Plunge

More On Yesterday’s Plunge

Courtesy of Karl Denninger, The Market Ticker 

If you had any doubt about what I have been talking about during this entire ramp job off 666 – that the so-called "bull market" was in fact not much more than a handful of institutions buying shares with free Fed money and passing them between one another hoping to distribute them to you - you should be thoroughly disabused of your skepticism after yesterday.

"Revenge of the algorithms" writ large, basically.

We keep talking about how financial innovation has "helped consumers", "helped businesses" and "made markets more efficient."

Let me put this in nice, large letters for you:

That claim is one big fat LIE.

If you need anything more after yesterday to understand that all these "algos" have done is create systemic risk and permit a handful of very large institutions to siphon off more and more of your money into their pockets like an insane hoover vacuum cleaner on steroids, you need a lobotomy.

The crooners are of course out in force this morning, among them Jeff Immelt:

“This is a point in time when the world needs the U.S. to be a beacon of stability, a beacon of reliability,” Immelt said during an interview at the 92nd Street Y in New York with Norman Pearlstine, chairman of Bloomberg Businessweek. “The world doesn’t need the U.S. in a food fight right now, with everything that’s going on in Europe. We should be the safe harbor.”

But what’s his definition of this?  Why, to make sure GE can continue to siphon off more and more money from the productive economy via GE Capital!

“Financial services is a very important industry in this country,” Immelt said. “Goldman Sachs has been a partner to GE for a long time. We trust them, they’ve done great work for us.”

Yep – hinky derivatives deals are great for Goldman, and might be great for GE as well.  For the rest of the world that actually produces something?  Not so much.

“This point about damning Wall Street isn’t good for the American economy,” Immelt said.

“Some theoreticians that convinced themselves that you can have a great, productive country


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Phil's Favorites

Does 'deplatforming' work to curb hate speech and calls for violence? 3 experts in online communications weigh in

 

Does 'deplatforming' work to curb hate speech and calls for violence? 3 experts in online communications weigh in

Twitter’s suspension of Donald Trump’s account took away his preferred means of communicating with millions of his followers. AP Photo/Tali Arbel

Courtesy of Jeremy Blackburn, Binghamton University, State University of New York; ...



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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Politics

Trump supporters seeking more violence could target state capitols during inauguration - here's how cities can prepare

 

Trump supporters seeking more violence could target state capitols during inauguration – here's how cities can prepare

The FBI says armed protests are planned at all 50 state capitols ahead of President-elect Joe Biden’s inauguration. Paul Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Jennifer Earl, University of Arizona

Americans witnessed an alarming and deadly failure in planning and policing at ...



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Zero Hedge

Millions Of Workers Are Still Calling Out Sick Or Taking Leaves Of Absence Due To COVID

Courtesy of ZeroHedge

One of the biggest hits to supply chains across the country hasn't just been business shut downs, but rather the residual effect of employees calling out sick.

In addition to calling out sick when employees have Covid-19 or similar symptoms, some employees have been calling out because they are still simply too fearful of returning to work. 

This was the case at Smithfield Foods, Bloomberg notes, where 50 of the company's 2,300 employees have still not returned to work. One worker told Businessweek: “We work so close together. It’s like pulling teet...



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ValueWalk

US Consumer Confidence Increases At Start Of 2021

By Refinitiv. Originally published at ValueWalk.

WASHINGTON, DC ‐ According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, American consumer confidence for January 2021 is at 50.9, up 2.8 points from last month. The index fielded from December 25, 2020, to January 8, 2021.

Q3 2020 hedge fund letters, conferences and more

American Consumer Confidence Is Back Up In 2021

After a sharp 4‐point decline in December, American consumer confidence has returned to levels seen in September 2020 (50.6). The Current, Expectations, Investment, and Jobs sub‐indices all experienced ...



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Kimble Charting Solutions

Treasury Bond Yields At Make-Or-Break Decision Point Says Joe Friday

Courtesy of Chris Kimble

Treasury bond yields (and interest rates) have been falling for so long now that investors have taken it for granted.

But bond yields have been rising for the past several months and perhaps investors should pay attention, especially as we grapple with questions about inflation and the broader economy (and prospects for recovery).

Today we ask Joe Friday to deliver us the facts! Below is a long-term “monthly” chart of the 30 Year US Treasury Bond Yield.

Counter-Trend Rally In Yields Facing Strong Resistance!

As you can see, treasury bond yields have spent much of the past 25 years trading in a falling channel… but the coronavirus crash sent yields...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Chart School

Best Wyckoff Accumulation for 2020

Courtesy of Read the Ticker

Yes folks there has to be a winner. Price and volume in the right place. Very nice eye candy!


Introduction ...

Ethereum was posted on RTT Wyckoff Campaign blog for monitory and trade entry. To watch the RTT Wyckoff Campaign blog is part of the RTT Plus service. After all you only need one to two great accumulations in a year and returns will be fantastic.






Charts in the video ...


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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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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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