S&P correction

Discussion in 'Trading' started by Mecro, May 11, 2004.

  1. Mecro


    I was just looking at 52 week daily of S&P and thinking. It looks like the market is correcting the run up from mid Dec to mid February. That run up was too fast and did not have proper fundamentals behind it. The December/January was a big factor-institutions had few money losing stocks to sell.

    I think the S&P will fall to 1020-1060 area before resuming a bull market. I'm thinking 6 month time, choppy, low volume and basically indecisive.

    Comments, criticisms?

    P.S James Stock and aliases stay the f**k outta this thread.
  2. I agree, and think the fact that the next FOMC meeting in june will end 2 hours before the end of Q2 will give some added fuel to the downturn.
    Closer to 1000 flat is my guess - but it doesn't really matter what the number is - only the direction. And I believe in longer term problems too - but that's because I care to much about world macro I guess.
  3. I believe that the FOMC meeting in June will actually end any sort of correction that may still be intact at the time.

    The sooner the Fed raises Fed Funds, the better.
    The rest of the interest-rate complex has already discounted this move. The actual news of a Fed Funds increase will certainty, and fuel a rally.
  4. I, too, believe 1000 is a plausible downside target for the S&P 500.

    Equity prices will be caught in a tug-of-war between higher earnings and higher interest rates, with the latter ultimately prevailing. On the other hand, if interest rates move lower, then earnings growth will slow ... or turn negative.

    Either way, it's doesn't seem likely the S&P 500 will soon return to 1150.
  5. The easy money on the downside has already been made.

    When the trend is clearly down on the chart.. like it is right now the risk to reward stinks... unless we are in a potent bear market which is clearly not the case.

    Since the fundementals still appear to be good excluding interest rate worries.. I bet the market will chop around in this range with an upside bias. The 200ma's have been hit on all major indices so I am no longer heavily shorting this market at these levels.. unless we get a nice strong rally... testing the 50ma.

    Mecro your analysis is late to the party.

  6. Does anyone really believe that an increase in the Fed Funds rate from absurdly low historic levels of 1% is seriously going to derail this Economy?

    So what if the Fed raises Fed Funds by a quarter of a point!

    Come on guys.
    Get a clue!

  7. After all of your threads warning us about how consumer sentiment and consumer credit is in the toilet, and that the Economy can't get out from underneath tremendous consumer debt loads, you are now telling us that the "fundamentals still appear good"???

    Dude, you really need to stay away from that crack pipe.
    You really do.
  8. Key word is "appear".

    In reality as I have posted in countless threads the underlying fundementals are horrible. However, the eco data coming out and earnings are still strong.. so that will pair some of the losses we have seen as the market test their key 200ma.

    But believe me.. if we do get a decent bounce to the 50ma.. I will be looking to short aggressively. Right now risk to reward stinks... as I have said once people that were bullish get bearish because the charts are broken.. the big $ was made and any further downside ( excluding major terrorist attack) is pure panic and a decent buying opp.

  9. The way that you rationalize and twist economic fundamentals as to reasons behind the trades that you say you put on is just something short of bizarre.

    So now we have Trend Fader on the books as covering his "imaginary" shorts at the following levels:

    Dow 10,019.47 +29.45
    Nasdaq 1,931.35 +35.28
    S&P 500 1,095.45 +8.33

    All because the indexes hit their 200 day moving averages and the Economy still appears to be in good shape. Wow, will wonders ever cease!

    Do your parents know that you are on the Internet again tonight???
  10. I started to scale out my short as they were breaking their 200mas yesterady... not at the EOD today.

    Nice try.

    #10     May 12, 2004