Doesn't this seem a bit excessive?

Discussion in 'Trading' started by Tsing Tao, Jul 1, 2011.

  1. Tsing Tao

    Tsing Tao

    I admit to not understanding the markets on many occasions, but doesn't a near 5% move in 5 days seem a bit much? I get it that the Greek issue was resolved and it was end of the quarter/6 month period for window dressing, but holy crap. The power of this up move is phenomenal, c'est ne pas?
  2. A little bit excessive, but not too uncommon of a move if you look back since 2009.
  3. Yes does seem to be overwhelming. I was reading somewhere a while ago , (can't remember where) and it emphasized the importance of staying in the market if you have a longer term horizon because the majority of the years move usually occurs in a 20 day period or something similar.
  4. Locutus


    Yeah, on first sight I might agree, but it's not that phenomenal if you consider the sheer amount of volume (and time) that's "trapped" in a negative news and fundamentals spiral sitting below the current move up. You can very easily see these people are collectively realizing their mistakes (and there is a shitload of them too) and there is just no way they can all get back in. Very much like last summer, except it's happening at a much more rapid pace it seems, this time. Instead of a slow grind up we get this crazy-looking mofo of a rally.

    Funny thing is, there has been NO upside without a catalyst directly fueling it. There has been a rally in anticipation of Greece votes (everybody knew this wasn't gonna be an issue right? I did), then a sell the news after the vote, then the sell the news was bought, then flat until some good fundies yesterday, then flat and now we have some good fundies today.

    The fact that no range/resistance has been broken without pretty much forcing people back into equities from fundamental reasons(nose held shut) suggests risk appetite is still not even close back to "normal" levels let alone that this market is remotely close to being overbought. There is still a shitload of scepticism in the market. First it was Greece, now everybody is saying "but, but Greece isn't over!!!" and "In a month the US will go bankrupt!!" or "BUT THEY TOOK OUR JOBS!!! GODDAMN IT!!!" People are desperately seeking for (bad) reasons not to "believe in" this rally and the market is flipping them the bird hard.

    Now I have to admit, I would have expected some pullbacks to take place and for the move up to be less aggressive. But whatever, this is good too, even better really. Who needs pullbacks? I'm slightly less bullish than I was over the past two months now, but I'm still more constructive on the upside than the downside for now.

    There's no wall of worry to climb here, it's a fucking empire state building that we are climbing right now. While the market is continuing to exceed my expectations by such a wide margin there is really no willingness on my part to sell, and apparantly not just on mine.

    By the way, told you so.

    Societe Generale at 42.37 today. Up from 37.8 where I got in. Broke its intermediate-term downtrend pretty forefully today as wel. Who'd have thought it would be here a week ago? I certainly didn't...

    Edit: I forgot to mention the "end of the quarter window dressing" as one of the reasons which is commonly used to be sceptic of the move up. There is positive seasonality in this period so it was more likely to go up than down, but that's not a valid reason to expect it to come abck down anytime in the near future.
  5. luisHK


    Not sure how this will help the issue at hand, but the proper spelling is :

    "n'est ce pas ?"
  6. Pardon my Greek, but 5 days of Short rear-ending is indeed a bit excessive.

    Γλουτοί Βίδωμα μπορούν να βλάψουν
  7. Tsing Tao

    Tsing Tao

    I don't remember you telling me anything on Societe Generale, but good on you for hitting it right.

    Regardless, I'm not short or long (playing currencies) but I do think there is little fundamental basis for a rally like this. The economy is just getting worse by the day.

    But then again, the market doesn't really care all that much about the economy.
  8. Locutus


    If you think 5 days is excessive, what are you going to say after weeks or even a few months of getting rear-ended?
  9. Tsing Tao

    Tsing Tao

    You think this goes on for weeks and months, do you?
  10. Locutus


    I have no idea, but this does look like it could easily be the birth of a solid uptrend in the direction of a new 52-wk high.

    Worst-case we'll have a chop summer and we retest the lows, but I find that pretty unlikely.
    #10     Jul 1, 2011