I think we're beginning to see equity markets not liking the idea that rates will stay low for so long. You can only rally so far on the idea of low rates until you realize it means that growth is nonexistent for the foreseeable future (e.g. Japan). In any case, SPY and QQQ charts look very different at this point, something for both bulls and bears.
Ive been shorting for a while now.....of course im not shorting the entire market. You have to pick ur short trades very wisely. As an options trader, there where some really good short trades on equities....and there were some really good long trades as well. Trading both sides of this market is, like I have always done, trickey. I dont scalp, not a SOES bandit, i hold on many diffrent time frames. However, although i will trade what I see, i feel super bearish on this market. I have started to position some shorts in the Homebuilders and Tech areas. These are for a longer holding, I am long a few things over the weekend, looking to get out on Monday........but like i said....Im overall bearish but that does not mean there are not long oportunities out there.
I am 95% cash as of friday sold most long positions. The yesterdays bond spike has to play itself out before the market direction becomes clear. Too much uncertainty so better to be on sideline.
GOOD, hopefully many will start to move to cash and the fear will set in. That is what we need, we need a new shake out of the sheep before this thing will break down.....Emtions will should bring volititly......which will be good for all the daytrader out there....and swing traders.
Everytime I think that the Homebuilders might be a good short, I close my eyes and repeat to myself three times: The group is only trading at 8 times earnings. The group is only trading at 8 times earnings. The group is only trading at 8 times earnings. Now they are up to 10 times earnings and I repeat the following to myself: The long bond is at 3.8% The long bond is at 3.8% The long bond is at 3.8%
Yea my bias is still short. I had a 25% short positions on.. and I rushed to cover on friday. I ended up losing a little on that particular trade.. and ended the week almost flat. When the IWM hit 120 I shorted again.. I still have a pretty big short in the DIA. I still continue to sell the highs and buy the dips. Overall I think upside is capped and we will probably churn lower or chop in the range. The dow is testing the 50ma.. and next week we will see what happens. The nasdaq, S&p, dow.. are completely diverging and yes we are getting huge sector rotations. This is either a sign of the top or just pause before the next major up leg. My gut tells me that the market is 50/50 down the line.. just as evenly split as the Bush/Kerry election. --MIKE
but while all the macro fundamentals tell me that we should be selling off big time, the short term micro picture is looking better by the day. IMO we will see a substantial rally(early to mid summer) before things turn seriously south in 05.
I am currently saying that over the course of the next few days to weeks the market has a higher chance of continuing its move lower. I can agree with this now, I will "weigh in" and say for the general market direction for this next week, I say down... So enter less longs for your swing trades...as a stocks direction is 60-70% dependent on the general market direction. Michael B.
I shorted some more IWM at 120 and knew I was on the right side when the ES broke out from its narrow intraday compression. Locked in some profits along the way down... Nasdaq looks like real shit. --MIKE