Discussion in 'Trading' started by LT701, Jun 5, 2008.
if you have an opinion, tell us what it is, and why?
let's try to make this a constructive thread
which time frame?
any you have an opinion on
I think you have to stipulate, otherwise you'll have people commenting on various time frame charts & you will not have anything constructive ImPO
well, i mean primarely in the largest time frame, and i'll throw out an opinion: bear, because it's below the 20 month avg on dow and spx. but new highs on the dow transports complicates things
but i'm not pigheaded about it, i'm not here to try to convince people it's a bear, i'm more trying to hear an intelligent bull tell me why it's a bull, or an intelligent bear give me their opinion why it's a bear
my primary focus of this question is technicals, but if people have supporting fundamental observations, that's ok too. my fundametal observation woul be that all stimulus goes straight into gas and oil, which strangles people more than the stimulus helps them. but again, i'm not trying to convince people of that, i'm asking for other points of view, i'm just tossing mine out there to get things started. if people want to debate these points, that's fine, but my main interest is what are other's bull or bear case?
I have made money on the long side and I have made money on the short side in the last many months.
But To me we have been in a bear market for the last 8 months and I have treated it as such. I began shorting Housing stocks and Financials stocks last spring and I have had some spectacular returns and trades and overall portfolio returns....some of the best short/bear market tradesI have had in the last 26+ years of trading for me.
We made highs last Sept and the market has been down since and wallowing away for the last 8 months. That is a Bear Market to me. The economy is crap. Housing is in a recession. Various sectors of the economy are in a full recession, housing, auto's, financials etc. The overall economy eeked out a meager .6 positive GDP. We have inflation rearing it's ugly head. Gasoline prices weighing on the American consumer.
The Bear market will continue till the credit crap is over and housing has a light at the end of the tunnel. The American consumer drives 3/4 of the economy and we can't have a sustainable bull market rally till the U.S. consumer is in better shape.
I'll continue to stay mostly on the short side for position and swing trades and cautiously enter some long positions for day and very short term swing trades. That's the way I will be trading this market.
Ultimately the fate of stocks rests with interest rates.
Stocks offer reasonable valuations in this rate environment. It's the old saw "where else can you put your money."
OTH: Trichet is signaling ECB rate hikes and Treasuries are breaking out to eight month highs in yield. IMO there's a full 25% chance of an immediate collapse in global government debt securities.
An Obama win will play havoc with Bond markets. For a lot of Carteresque type reasons. You can see it presently on the tape. Idealistic 20 something European's will argue but socialist economic policies freak out Bond holders. Especially against the backdrop of $6 Corn and $130 oil. Put the Long Bond at something like 7% and it's an altogether grim scene for asset prices.
Sorry, but what is the longest term? Monthly? Quarterly? Yearly? ImPO you really have to define which time frame you would like people to comment upon. Daily, weekly, monthly, quarterly may all be looked at differently as you know. For instance Monthly chart may still be looked at as bearish, but Daily pointing to a possible bounce/reversal to upside.
We are in a Bear Market.
I use the S&P as a guide to the broad market. We are very clearly in a bear market by my definition, which is anything trading below its 200 day sma is, as far as i am concerned, in a bear market.
The S&P is below its 200 sma!
It is trading in a broad downward sloping channel defined by a line drawn through the 1576 high of 10/11/07 and the recent 1440 high of 5/19/08; and a line drawn through the 1367 low of 8/16/07 and the 1269 low of 1/23/08.
Not only are we in a bear market but we are in recession and that recession is still deepening.
We are also in a period of high inflation.
Commodities are in their own bull market. The recession will eventually have some minor moderating influence on inflation and commodity prices. Not until the Fed begins to tighten, and inflation cools significantly, however, will we see a significant pullback in commodity prices. The pullbacks we experience until then will be temporary and shallow.
This will be the deepest recession since the great depression for those in their seventies or older. For all others, this will be the most serious recession of their lifetimes.
Fiscal responsibility will slowly return to Washington with the new administration, and the economy will very slowly improve.
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