I still think there is more upside before the real scary drop comes. We are almost at month end, and I almost can guarantee next week the Window Dressing will be spectacular to really drive us bears nuts!! I am gonna try and step back tomorrow out of all my short positions if I get the chance. And even start looking for long positions if it looks like every Joe is short. Just look at VIX and put/call ratios today- everyone went short!! More on my blog http://lauristonletter.blogspot.com/
Yes you did doublea. And you have proven to be a very wise man. I apologize for not mentioning you in my list of people I like to hear from, but you know you are way, way up there. You were correct when you told me my prediction late last year was incorrect and you cited bond yields. I did list my reasons that I predict a down year for the s&p on MLK day. Here they are again: The reason i can live w the likes of bozo, apex capital, dwi, nonlegal etc etc is b/c of people like Doublea and Polpolik. These 2 represent the very few smart traders who rarely post, and always make their posts count. It is my privilege that they choose to share info on my thread. And of course RM and Pabst as well, and inandlong, now where is inandlong ??
While the S&P certainly looks less attractive after the recent run up and the rising 10yr bond yield, the S&P's forward earnings yield of 6.37% is still well above the 10yr bond yield of 4.87%. Consider this: the differential between these two yields correctly predicted the stock market returns in the last 7 years in a row. According to the same model, 2007 will be an up year for S&P 500.
"excessively high bullish sentiment" i think thats the key if we have a top. anyway with this market you never know. that's why i don't like to make calls or play the guru role good night
The outside range of this Bull widened just a bit with the last rally to 1447.25 Prime Resistance in the eMini S&P but this pig hasn't seen Prime Support (bottom) since June when price created 1229.00. This means there is plenty of downside to drop if the Market "DOES" pick up momentum. Currently the inside range targets to the downside are 1426.75, 1412.25, 1387.50, 1378.50, 1365.50 & 1336.00. I really doubt we will breach any lower than 1336.00, as at those levels a new Prime Support level will be created, setting up to make another run at the top. If the next Prime run at the top falters we will then have ourselves a nice long slide setting up but that scenario is a ways off. Currently the last inside oscillation support bottom was 1426.75 and even though the drop today was substantial, we couldn't take it out with a single punch. Hey, maybe tomorrow. This is why reading those fixed points of support and resistance is more accurate than calculating them. There is no margin of error in defined oscillations.
I'm not sure where S&P will end in 2007. I'm still long-term bullish because the junk bonds are in an uptrend. I believe this call will hold true for at least 3 months and maybe 6.
hahaha havent laughed this hard all day man! i can just picture thorn back then on an internet board posing as a multi billion dollar hedgefund manager as he blindly tries calling tops on the nasdaq every 10 points and continues his outlandish claim that he runs a hedgefund as he manages to blow roughly 400 top calls on the way up, all the while patting himself on the back for being the greatest trader ever. hahahahaha now thats comedy.
This is a key point I feel because I was certain we'd violate this area and we didn't...If your a perma bear it's something that needs to be considered..However, the market may just have run out of time and exhausted itself. You'd like to see continuation overnight if not by the open.
I agree. We are chopping around starting out in the overnight but have already matched minor resistance at 1430.75. We might take out that bottom sometime tomorrow but the overnight isn't looking toward the downside right now.