I can remember in 2006-2007 all the chatter about how low the Vix was, and this was the time to sell. The Dow went from 11000 to over 14000. I gave up using put call ratios and the Vix. Just focus on the price action thats what puts money in your pocket.
"I feals very stretched, but I remember in 2003 I felt this way and the damm thing kept rising. bearish patterns, divergences blown to pieces." Well if this has any correlation to 2003- big runup started the day after Memorial Day holiday, ran straight up for 10 days, started pulling back and traded up and down and sideways , with a fair amount of pullbacks through the summer.
Next week is Options Expiration. I would expect prices to hold up until that's out of the way. A logical place for the current trend to halt would be at strong resistance of the Jan 2009 highs -- somewhere near 940. We are close.
There are quite a few bullish headlines. Regular Joe may decide to finally put his money to work in the market. The coming week should be interesting. Emerging-Market Stocks Rally to Seven-Month High; Brazil Rises Bloomberg - ‎May 8, 2009‎ MARKET COMMENT: London Stocks End Up Near 2009 High Wall Street Journal - ‎May 6, 2009‎ Wall Street stocks finish week on five-month high National Business Review - ‎May 8, 2009‎
I for one have been quite bullish on the vacuum up as in my thread the past 7 weeks. More for technical reasons than anything else. I am a bit concerned in the short-term for the following reasons: 1) Sell the news in banks. Now that all the 'unknowns' are out, as in the results of the stress test, history tells us that the 'smart' money will no longer chase the unknown. Did not like the action into the bell on Friday. The banks did a rip largely due to reweightings in WFC and MS, about 38mm of each to buy on the bell. 2) As mentioned in this thread by MVAC, the SOX index action has been quite negative in an up tape. MSFT, CSCO, AAPL, and the semi's in the SOX have turned south and can't seem to get out of their own way. They led the way up with NDX having been the first to go positive on the year several weeks ago. 3) The 30 yr. bond auction did not go well and in fact higher rates are soon to be upon us. The gov't can do little about this with the Fed rate at zero and the Treasury having to sell more paper to fund itself and aggresive stimulus. As Warren Buffet implied, increasing money supply will be quite dangerous and could lead to dollar decline and inflation/stagflation. 4) Now that the quants have largely covered, you'd have to think, the worst thing that could happen to them in an already abysmal year, is for the market to turn south now. Murphy's Law; isn't this what always seems to happen? IMHO, the much anticipated drawdown could be as violent as some of the updrafts as of late. Think this might actually be healthier for the remainder of the year than if we just keep up the current pace though. -Tide
what's the evidence that the quants are really suffering? can this be quantitated in some way? how does it compare to an average drawdown for the quants from the previous years.
Thanks! I forgot to ask the same question Personally (as a guy who totally agrees with this thread's subject) I have a target between 777 and 800 but our dear guru may have a better idea and I would love to know it! This applies to the SPX of course