LOL Your right, the economy is flying high. corporate earnings average half of what they did a year ago realestate markets are getting devistated oil and cost of living are through the roof a mad man is threating to nuke the world another mad man is spending billions in a desert chasing after rabbits yep alls well
Well, since you've dismissed every reason for a selloff on various threads, can you tell me what a justified selloff is/reason to be short?
Good question and while at it, maybe some good reasons to go long too. Always dismissing the shorts as being to pessimistic, did it ever occur that a long is maybe too optimistic? The reasoning should hold both ways. I'm neither bear nor bull in my trading, but I don't see any reason to be long currently (for more than a few minutes ie.). If there ever was a 'close to the edge' situation it is now. Ursa..
The yesterday's rally on the "immediate cut" rumor is now clearly a bogus one, since the rumor has not materialized in anything. I am not surprised that the market is holding up: the big long positions taken yesterday are "defended". My bet, however, is that these positions will be unloaded today or tomorrow, and we are going to touch (and likely to penetrate) 1490 on the S&P again. Accordingly, I am short ES from 1529.75.
Just because the fed didn't cut (YET) doesn't mean that the rally yesterday didn't occur for that reason. Look what happened when they cut the discount rate weeks ago, same exact pattern: Market was about to fall into the abyss intraday, the rumor came out, massive rally to flat at the close. Next morning they cut pre-open on OPEX and demolished the shorts. Three things had to happen for the move yesterday in lieu of all the negative news (ie. in contradiction to fundamental data coming out): 1. A rumor is released that for some reason is perceived to be true 2. A MASSIVE amount of index futures are bought at the market 3. Shorts are forced to cover, often by stop loss triggering. I think we're on the same side - I was short too and am also quite bearish on most equities. However, I don't see how THIS bounce could have happened the way it did (and I'm not alone in that respect). Read the PPT article nevadan was so kind to have posted above - it has a lot of merit and the Fed/Treasury/Goldman is getting more and more bold with their market interventions. Here's one section from that article (http://www.sprott.com/pdf/TheVisibleHand.pdf): "While we cannot be certain what prompted the Plunge Protection Team story of February 23, 1997, John Crudele offered a persuasive explanation in August 1996. In an article titled âSome Advice on How to Successfully Rig the Market,â he outlined steps that the Clinton administration should take if it intended to prop up the stock market. Among his recommendations, Crudele suggested the following: Leak a story to your favorite puppet newspaper about how the government will âdo all in its power to prevent problems in the stock market.â Thatâll work. Keep the statement vague and believable. And let the gullible press carry the message for you" How many times have we seen that exact message lately?
"Accordingly, I am short ES from 1529.75." Good fill, only 703 contracts traded there thus far today.
Even if we assume that PPT does exist and intervenes, it's unlikely that such an intervention would occur when the market is just 5% off the all time high (on the Dow/S&P). If we are off like 10% on a single day, I'd acknowledge such a possibility. Until then, however, I am trading to fade the insanity.