Lussenheide Capital Management Thursday, June 15, 2006 Broadcast The equity markets finally have found some footing, with a large 2 day turn around, coming out of a severe oversold condition. It does somewhat amaze me how the Wall Street Media has basically declared this correction "Now Over." A quick look at some sentiment indicators (Put/Call ratio, McClellan Oscillator etc.) shows that they have bounced back much faster than the market itself, with those indicators now treading at neutral. The indicators bouncing this quickly shows a rush of bottom feeders that usually are wrong, and is not a healthy condition. The market will have to build a base and back and fill in a steady fashion to be sustainable over time. The market remains in a downward channel of lower lows, and lower highs and as we stated last week , markets never tread a direct line. They move more in a two steps forward one step back type of a fashion. This market can retrace 50% of its drop since mid May and still not be technically healthy. Our intermediate trend models remain solidly bearish. This current correction should not surprise anyone. Although market action over the last couple of years has been fairly staid and far from exciting, there has not been a 10% correction in the SP 500 since March of 2003. This is the third longest streak in the history of the SP 500 (which dates back to 1942) . Drawdowns and bear retreats, with 20% or more drawdowns are regular occurrences in the history of the market, and the primary reason that using our defensive trend following models is always sound wisdom What Word Can Be Added To The Following Terms??...Record Trade Deficits, Falling Real Estate Prices, Falling Equity Prices, Falling Dollar, Record Budget Deficits, Negative Savings Rates, Rising Interest Rates, Record Oil Prices, Rising Inflation, Inverted Yield Curve. If you guessed Recession, then you would be right. I am growing increasingly concerned that the story that the markets are telling us is a recession starting as early as the end of this year. Historically the business cycle has ran about 48 months long, so this recovery, since 2001, is already old by that standard. Wise business people and individuals should be watching inventory controls, hiring practices, accounts receivables/credit and debt levels as a precautionary measure. Hopefully Fed Chief Bernanke will pull a rabbit out of the hat and engineer a "soft landing". Count me as skeptical. Our current positions, BUY SIGNALS... NONE SELL SIGNALS ...US Bonds, REITS, NDX 100, SP 500, Japanese Stocks, European Stocks, CRB Commodity Index, http://www.investmentwarrior.com Bill Lussenheide-President Lussenheide Capital Management Inc
Garden variety religious nut who found another religion; market timing. He was spamming usenet into oblivion a few years ago. [gag]: http://www.investmentwarrior.com/companyinfo.htm
Logged on to that link. Absent your views about him (because of his religion?? charity activities?? spamming??), do you disagree with his following statement: "LCM does not rely on emotional or subjective reasoning for trading decisions. Says Bill Lussenheide, 'The crowd is almost always wrong at major turning points, and this is where the most profit can be made or lost. By using mathematical models, one ensures that they are never too optimistic or pessimistic at the wrong time. Emotions are the investors worst enemy!'"
Right, I hate charitable giving. Sickos. I wouldn't entrust my kid's lunch money to this clown. "Mathematical models" = MACD histogram. Hey, who am I to argue with a guy who trades a mean-reverting method with a marketing degree from Kankakee Jr College.
I'm sure you didn't mean to say giving charity would be at the expense of your kid's lunch money, as you seem like a successful trader. I do feel the poor must be reckoned with even when it's their fault (= "mercy"), how much more so when it's not. I know you sold a lot of puts, and I hope you're right about market direction.
I didn't say that. I stated that I wouldn't entrust my kid's lunch money to the guy. I don't think his MM biz is operating as a charity, although any money invested would probably needed to be written-off as such. I am neutral delta currently. I sold $4mm notional in exotic puts and covered last week on a touch of 116200 on ES futures.