Get The Hell Out: Part II

Discussion in 'Trading' started by ByLoSellHi, Jun 6, 2008.

  1. It's partly in response to today, but mostly in response to what I see as a snowball of assorted (mainly negative) shit rolling our way.

    If we were in foxholes together, I'd be the one telling everyone I had a very bad feeling tonight.

    Usually, I'd brush off a bearish article (or a bullish one, for that matter; they're a dime a dozen) like this:

    ...but for whatever reason, it really freaked me out to read it. I can't find myself disagreeing with his premise.

    At any rate, I'm hedging, hedging, hedging, and buying some gld, too.

    I'll be closing out many of my long positions that are too expensive to hedge against. It will be a mistake if we've formed a bottom, but I don't think we have, and I'd never forgive myself for not acting on my cumulative intuition this time if it all comes to pass.

    This is not premonition. It's a feeling based on my observation that there is way too much complacency given some very serious shit hitting the fan in economic and geopolitical terms right now.

    A 3% drop on the indices today is nothing compared to what I fear is around the corner.

    I'm not averaging down, and I'm not buying these dips.

    Good luck, whether you're long or short.

  2. hayman


    I went all cash and bonds 2 weeks ago, and will not come out of the foxhole until after the election. Come January, I will re-assess the situation.

    Right now, my 3.4 % MoneyMarket is looking pretty darn good.....not keeping up with inflation, but better than losing a pile.
  3. There is nothing in that article that really concerns me. Anyone who is long is only risking march lows. That is not the end of the world.
  4. Breaking below 1370 on the spooz did serious technical damage today, HG.

    And oil is spelling FUBAR with its funky price action.
  5. The risk is just not that great. It's not like one wouldn't have time to get out of their long positions. Have I tightened my stops on my longs? Sure, because the bullish percent index turned negative last week, but not negative enough to be that concerned. I even took some profits yesterday on a couple of longs I had. You just play things closer to the vest. Technically, I don't see anything glaring at me. We have maintained an uptrend for more than 5 years. Until that trend is broken I will remain cautiously bullish.
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  6. Mvic


    Agreed ByLo.

    Look at the main page of debka files and there is little doubt that with such political forces in play oil is not coming back down any time soon, in fact it has the potential to go much higher.

    The reality of the housing situation is starting to finally hit home, the spring season has just seen much lower prices and rising inventories and there is the potential that already skittish banks are going to have to bring much off the toxic stuff back on to the balance sheet that heretofore they have been able to keep off their books further curtailing available liquidity.

    The Fed has no more bullets left and other central banks are hiking or will soon be putting the $ under further pressure and ramping US inflation further and now we have the added rising unemployment to factor in too.

    Record jumps in housing inventories, house price drops, mortgage and HELOPC defaults, BKs personal and corporate, PPI, record low Consumer confidence and debt levels, record oil prices, and some truly frightening unfunded liabilities on the horizon. The financial sector in such disarray that no one knows what anything is truly worth and most of the market has not be functional for months now (perhaps all that cash that is so often touted is actually being held hostage in things like the ARS and other instruments that are supposedly as good as cash until the become illiquid overnight.

    Will this be one of those situations where six month to a year from now it will be so obvious in hindsight that perception and reality were at such great odds to one another. It certainly feels like that.

    I am not sure if this is where the market turns over for the next leg down but volatility usually occurs at major pivot points and risk reward is good here with a double top in the QQQQ's to trade off of and a broken neckline in the SPY on an outside range reversal day as well as the divergence in the transports and the flagging market internals in the small caps. With all the nightmarish press that investors will be subject to this weekend it will be a miracle if we don't open another 200-300 points lower next week and have a 500 point down day somewhere in there before the week is over. Currently I am just looking for SPY 130-1 and expect a bounce before March lows are threatened.

    The time when a lower USD was helpful to US equities is over, lower $ means higher oil. Stories abound of the smart money taking flight and moving to Japan and other parts of Asia, the Armageddon scenario, the loss of confidence in the $ as the world's reserve currency, that we have been dripping toward the last several years is picking up steam.
  7. Mvic, you summed up nearly precisely the factors that are snowballing.

    It's way too much for the markets to digest and provide any clarity at all.

    It's one thing after another, nonstop, and unbelievable.

    Housing, energy, financials, turmoil in the mideast, spiking unemployment, some nasty earnings misses (GE figures prominently), a seemingly impotent fed reserve, lack of liquidity, auto sales, and on and on and on.

    I've never seen so many negative factors coalesce at one time
  8. Neither have I. As far as I'm concerned the market should logically be trading around 1000 right now but it's not. Personally I believe the market will start declining when some good news begins to appear. In the meantime, I am not going to argue with the market.
  9. part II: Buy with both hands a week from now :D
  10. I was bullish just a month ago, so that was the ultimate in bad calls, if I'm right now.
    #10     Jun 7, 2008