Discussion in 'Trading' started by shortie, Oct 1, 2010.
By now, the thread title's a dead giveaway.
In short (pun intended), I remain on bear capitulation watch.
I voted flat for last week, and that was wrong: market went up again. Given the ridiculously high levels of skepticism, a default position of bullish is the only one to take.
So, that's where I'll continue to be until we finally see the inevitable blowoff that will finally signal the capitulation of the bears, and a short-term top.
actually for the week:
In other words, we are going sideways. So if we go down from here I won't trust the move, because everything is saying "up".
Oh well. Only thing I look at during the trading week is the Russell, which was up for the week, so I guess I got fooled. My flat vote was actually correct on the SPY.
Either way, as that FT article I quoted shows, skepticism is sky high despite an amazing performance in September. Just the background you need to continue the September rally.
Aside from the overall markets I am just looking at where gold, silver and oil are going to end up, both up huge in september.
I'm bullish on gold but I think its going to come down pretty hard soon along with oil. Oil especially is completely overbought in this last months run.
No, it didn't. S&P and Dow were both down for the week. Every major index had some sort of shooting star formation on a weekly basis.
If you want to get into intermarket relationships (i.e., stocks when oil rises above 80), things get even uglier...
My record is 3-7 in this Pole. I voted Bullish this week so any fool can see that the SPY will be down this week
If you are watching oil and gold, then obviously you need to be watching the dollar as well. I don't see the dollar growing significantly stronger between now and the November election. Although the dollar index and the S&P are not joined at the hip, there is an obvious reverse correlation. The interesting thing is that higher crude prices which correlate with dollar weakness, are generally considered as a negative factor on the overall market. This does not seem to outweigh, however, the tendency of a weakening currency to push the market up.
Notice the circled areas look very similar. The 2nd circled area will probably do the opposite of the first.
By default, I'm always partly long, which is where I am. The rest is in cash.
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