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Is Santa Claus Rally Almost Done?
Edward Krudy of Reuters reports, Is Santa Claus rally almost done?:
The Investors But "The Rueckert said "A lot of stocks this When trading Inflation data BULLS IN THE EGGNOG Some see signs of the bulls getting into the eggnog. The American Association of Individual Investors' latest sentiment survey That is often seen as a contrarian indicator. This But gains have "We
"I don't think we're That The In addition, the 3-day moving The Chart-minded "When The 1,120 level, the top of a recent trading range, is seen as strong support. On Friday, the S&P 500 closed at 1,240.40 and was up 1.3 percent for the week. The Dow Jones industrial average .DJI LOOK OUT FOR FED HAWKS An If The "The I Why do I believe that QE 2.0 is not the end of it? Two reasons. First, policy remains reflate and inflate at all cost. The I quote Michael Hudson, economist:
December rally may be reaching its climax, with just two weeks to go
before Santa Claus makes his midnight run. Dwindling volume, excess
optimism, and history all point to a stock market that could be running
out of steam.
appear to have grown complacent as the CBOE Volatility Index, or VIX
.VIX, has fallen to levels not seen since April. Stocks have made new
highs on almost a daily basis. The S&P 500 .SPX closed on Friday at its highest level since September 2008 and the Nasdaq .IXIC scored its best finish since late December 2007, with many expecting gains to run through the end of the year.
Cleveland Rueckert, an analyst at Birinyi Associates in Stamford,
Connecticut, believes the year-end rally may be largely done.
majority of that gain may already have occurred," he said. "Most
people are more likely to be closing out their books at the end of the
month and looking for opportunities to open new positions at the start
of the next month."
that over the last 65 years, when the S&P 500 has rallied at year's
end, the average gain has been 3.4 percent between Thanksgiving and
New Year's. So far, the index has risen 3.5 percent since the start of
the period.
year have had very big gains and it really wouldn't be surprising to
see a lot of the managers close out positions and take some vacation
time," he said.
resumes on Monday, that will start the last five-day trading week
before Christmas. The following week will be cut short by the holiday.
With December 25th falling on Saturday this year, the U.S. stock market
will be closed on Friday, December 24th, in observance of the
Christmas holiday.
for November will dominate next week's economic calendar, with the U.S.
Producer Price Index due on Tuesday and the U.S. Consumer Price Index
set for Wednesday.
shows bullish sentiment reached a four-week high. What's more, bullish
sentiment has spent 14 weeks above its historical average -- its
longest streak in six years.
week, the S&P 500 has broken through closely watched resistance
levels and has climbed for six of the last eight days to close at fresh
two-year highs.
been accompanied by decreasing participation. Average volume during the
last three days of the week was 7.76 billion, well below this year's
daily average of 8.62 billion.
are entering now the beginning of the seasonal pattern where volume
really dries up," said Nicholas Colas, chief market strategist at the
ConvergEx Group in New York. "It seems like it's starting a little
sooner than usual.
at any risk of a meaningful sell-off into the end of the year, but I
think the basic contours of what the economy looks like are pretty well
set," he said.
sentiment was reflected in the VIX, also known as Wall Street's
favorite barometer of investor fear. Although the VIX edged up on
Friday, the index has fallen for six of the last nine sessions. It now
stands at 17.61 after hitting its lowest since April.
15-day moving average of the advance/decline ratio on the New York
Stock Exchange, a measure of the proportion of advancing to falling
stocks, has started to slip and currently stands at around 1.5. It
peaked this year in July at about double that, according to Reuters
data.
average of stocks making new 52-week highs has also turned lower after
a spurt at the start of the month. It now stands at around 125, down
from more than 250 at the start of the month.
breadth and ratios have not been "on board" this rally of late,
according to a report from McMillan Analysis Corp. Equity-only put-call
ratios remain on "sell" signals, the analysts say.
investors are bullish. The S&P 500 has closed well above 1,228,
the 61.8 percent Fibonacci retracement of the 2007-2009 bear market
slide, a key technical level.
a market surpasses a certain retracement level, then the probability
increases of a rise to the next retracement level, which in this case
would be a 76.4 percent retracement and that's a ways up at 1,362," said
Chris Burba, short-term market technician at Standard & Poor's.
ended Friday's session at 11,410.32 and was up just 0.2 percent for
the week. The Nasdaq closed on Friday at 2,637.54; for the week, the
Nasdaq was up 1.8 percent.
agreement to extend the Bush-era tax cuts over the next two years has
started to seem like less of a done deal. The agreement is expected to
be approved by the U.S. Senate on Tuesday, but could face a tougher
road to passage in the House.
the legislation stalls, resulting in higher capital gains and dividend
taxes at the start of next year, then U.S. stock prices could fall.
Federal Reserve's policy-making body, the Federal Open Markets
Committee, will convene on Tuesday for its last meeting of the year. The
recent clutch of stronger economic data could spark a debate over how
far to stretch the central bank's $600 billion stimulus plan, designed
to keep interest rate low through bond purchases.
hawkish members on the Fed may seize on this cluster of strong numbers
and use them to support the argument against" quantitative easing,
said Pierre Ellis, senior global economist at Decision Economics in New
York.
used to analyze all these technical indicators to death. No more. I
don't care how low the VIX is, it could go lower and stay there for a
long time. I believe that institutional and retail
investors should continue buying any dip that comes their way. Look at
November. Everybody thought Europe was going to collapse. Admittedly,
the Irish bailout is not a done deal, and Europe is a mess, but the fact
remains that there are powerful interests that want to see this rally
continue as long as possible.
The Fed and other central bankers will accommodate the global financial
system, providing banks with cheap funds to buy bonds, making an
instant profit which they use to buy higher-yielding risks assets all
around the world. This will shore up bank balance sheets and hopefully
trickle to retail investors who desperately need a wealth effect (but
wealth effect from stocks is much weaker than the one from real estate).
second and more important reason why I believe QE is here to stay is
that the US economy is still at risk for experiencing debt deflation. I
want all of my readers to carefully read Part 3 of an interview posted
on Huffington Post between Michael Hudson the report, and Michael Hudson
the economist. Part 3 is available here (and you can read Part 1 of "My Talk With Michael Hudson" here and Part 2 here.)
The
constraint on this Ponzi scheme was the ability of income to carry the
rising debt. As long as interest rates were falling, a given rental
revenue or equivalent homeowners' value could carry a rising debt. But
once interest rates reached their minimum, by 2006, there was no more
leeway left. Homeowners had to pay debts out of their take-home wages,
which have not risen in real terms for over thirty years now. The debt
charade no longer could be concealed.
This leaves us with the
problem of where we go from here. The Obama Administration's "solution"
is for the economy to "borrow its way out of debt." The Fed is
flooding the economy with credit to get the banks lending again - in
the hope that new mortgage lending will restore high prices (that is,
high housing costs to new buyers), saving the banks' balance sheets.
But
with much of US real estate already in negative equity, banks are not
going to start lending again on a large scale. The government doesn't
want to confront the fact that we have entered a period of debt
deflation. When debtors pay their creditors, they have less to spend on
goods and services. So market demand shrinks, corporate profits fall,
investment declines and unemployment rises.
To mainstream
economists, this is an anomaly. This shows the extent to which
creditor-friendly views have swamped common sense in academic economics
as well as in Congress. It reflects the power of financial lobbyists
to persuade many policymakers to embrace illusion over reality.
I
don't agree with Michael that we've entered debt deflation (at least
not yet), and corporate profits are rising, not falling. And while I do
agree with him on creditor-friendly views swamping common sense in
academic economics, I also know that the financial oligarchs and their
powerful lobbies have a stranglehold on the economy. They get first
dibs, and if there are any crumbs left over, then they'll lend to small
and medium sized enterprises (SMEs). The big banks don't care about
lending to SMEs. They care about profits, which is why they continue
trading aggressively in their capital markets operations. It's liquid
and pretty easy for them to lock in spreads and trade high-yielding risk
assets.
What does this have to do with the Santa Claus rally?
In the short-run, nobody knows how stocks will react. Over on Zero
Hedge, RobotTrader posted a link to Investor's Business Daily Top 100 list.
Should you rush out to buy Priceline (PCLN) at $400+? It could go
higher but the time to have bought PCLN and a bunch of other gems was
back in January/ February 2009 when I wrote about post-deleveraging blues and recommended a few of them.
The
great thing about the stock market is there is always an opportunity,
especially when you have a tsunami of liquidity out there looking for
yield. Don't get too caught up in all these technical indicators or in
the negative macro news environment. At the end of the day, the powers
that be will keep buying the dips because it's all part of the master
plan to avoid debt deflation at any cost.
Will it work? That remains to be seen. If you read Hoisington's interim quarterly update, the US economy is still in a growth recession and monetary policy is ineffective. I quote the following:
Commodity
loans can be financed at 1% or less. This encourages speculative buying
of commodities for inventory, thereby causing food and fuel price
increases. For household's of average means, funds for discretionary purchases are quickly drained.
This is especially evident since the pump price is now at or above $3 a
gallon. A 30-year mortgage rate approaching 5% only serves to
accelerate the downward pressure on home prices - the main source of
household wealth. In short, higher stock and commodity prices are not a
net gain in current circumstances.
So when we
speak of Santa Claus rally, we should qualify it. It's great for the
financial elite making millions in bonuses, but for the average
household struggling to get by, it means absolutely nothing, especially
if the economy keeps hemorrhaging jobs or creates insufficient job
gains. We are not out of the woods, especially on the economy, but
something tells me the stock market will continue climbing the wall of
worry, much like it did back in 2004.
»
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Time to unload my silver and buy the dips!!
Mr. Kolivakis, if you aren't part of the solution-which you clearly aren't-you are part of the problem. Your complete lack of an argument (other than the following: very powerful interests are going to do everything in their power-their power being of a profoundly corrupt and anti-social nature- to keep this game going) is precisely why no one should follow you.
You are doing nothing more than making a bet on the putative omnipotence of a blatently criminal element. There is a moral taint to your actions whether you choose to admit it or not, and that taint, at the minimum resides in your throwing your weight behind investing in a market that, due to unprecedented distortions, makes an absolute mockery of investment.
Nicely said Edwardo!
It is no coincidence that Leo is roundly ridiculed, opposed and junked by the majority of ZeroHedge posters. It is precisely because of this site's strong and unrelenting efforts at exposing and condemning the ongoing, escalating and overwhelmingly criminal and sociopathic actions of the financial and power elites that so many of us find ZeroHedge worth visiting.
And then, in total contrast, there is Leo, who openly and incessantly advocates surrender to, and collaboration with, those same power-mad and socially destructive elites. Is it any wonder that so many of Leo's posts have been routinely junked into oblivion? The fact that Leo dares to lamely make a show of trying to express his innocence in this regard only further proves what a disingenuous, duplicitous, dissembling bastard he really is.
I have nothing but contempt and hate for people such as you, Leo, and wish you all the worst.
I thought this was an investment site. Are you here to make money, or are you hear to moralize? There are plenty of good investments out there. Your staying out of the market to make a statement about your morals will only hurt you. The powers that be laugh and fart in your general direction. Canadian energy trusts if you are careful for example if you want to invest for income. There is something in this market for everybody. The "criminal" powerful interests will be in charge of this country long after both of us are gone. It has always been this way and always will. Amen.
Heck at least buy silver. that way you can have your moral cake and eat it too. Down with JPM! (and maybe make a little money at the same time.
There has been a lot of deferred purchases and deferred maintenance. Eventually this demand has to show up. There is only so long I can keep wearing the same underwear before it falls apart, and eventually I need a haircut. My car is a piece of crap and at this point I have to buy another sometime next year. Lots of people are in that position. My damn pool has a leak and needs a new pool liner. I held off last summer waiting for armageddon but it didn't show up. Bummer. I was all set with my silver and gold and trading ammo. People are eventually going to have to buy that new roof. many of the new spendthrifts are becoming tired of self denial. Seriously human nature being as it is we Americans can only defer purchases for so long before we have to have that shiny new gizmo. After all it may help us get laid. Also word on the street is that the big boys are going to try to show their true american spirit and ignite a rally. Look at the turnaround at Goldman. It's now patriotic to be long. It's the new American flag pin. Also this is probably our last chance to kill the deflation monster and the big boys have telegraphed this market move so everyone has a chance to join. Yes that might be a cliff on the horizon, but it's far away and kinda hazy. This lemming thinks he can either avoid the cliff or perhaps it really is a mirage. Forward Ho! Are you lemmings with me? Just say yes!
Buy your "I'm long America" lapel pins here!
Article picture caption:
"If you keep farting, I'll rip your goddamned throat out"
That is all I have to contribute for today, the look of the blue-coat trader was just too funny to pass up.
Stocks wih the highest short interest:
Ticker Company Exchange ShortInt Float Outstd Industry RBCN Rubicon Technology Inc Nasdaq 60.53% 17.23M 22.94M Semiconductors BPI Bridgepoint Education Inc NYSE 56.66% 17.25M 52.22M Schools GAP Great Atlantic & Pacific Tea Co NYSE 49.23% 31.29M 56.28M Retail (Grocery) PWER Power-One, Inc. Nasdaq 45.45% 85.52M 106.67M Electronic Instruments & Controls ATPG ATP Oil & Gas Corp Nasdaq 41.90% 44.43M 51.27M Oil & Gas Operations NILE Blue Nile Inc Nasdaq 40.82% 14.22M 14.39M Retail (Specialty Non-Apparel) CTCT Constant Contact Inc Nasdaq 38.67% 27.76M 29.05M Computer Services ADS Alliance Data Systems Corp NYSE 37.56% 50.22M 52.00M Computer Services PETS PetMed Express Inc Nasdaq 37.15% 19.77M 22.78M Retail (Drugs) BBBB Blackboard Inc. Nasdaq 37.00% 33.07M 34.40M Software & Programming CADX Cadence Pharmaceuticals Inc Nasdaq 36.40% 33.68M 62.06M Biotechnology & Drugs CONN Conn's Inc Nasdaq 36.32% 14.59M 31.76M Retail (Technology) MNI McClatchy Company, The NYSE 35.29% 50.63M 60.16M Printing & Publishing NTRI NutriSystem Inc Nasdaq 35.22% 24.02M 26.72M Personal Services HOV Hovnanian Enterprises Inc NYSE 35.16% 49.97M 63.11M Construction Services FSYS Fuel Systems Solutions, Inc. Nasdaq 34.87% 13.33M 17.62M Auto & Truck Parts CHBT China-Biotics Inc. Nasdaq 34.55% 10.89M 22.15M Biotechnology & Drugs AN AutoNation, Inc. NYSE 33.53% 41.70M 148.00M Retail (Specialty Non-Apparel) SHLD Sears Holdings Corporation Nasdaq 33.19% 39.43M 110.01M Retail (Department & Discount) COCO Corinthian Colleges, Inc. Nasdaq 33.16% 76.09M 84.38M Schools VECO Veeco Instruments Inc. Nasdaq 32.80% 39.40M 39.90M Semiconductors OREX Orexigen Therapeutics, Inc. Nasdaq 32.29% 27.57M 47.58M Biotechnology & Drugs TWI Titan International, Inc. NYSE 32.23% 33.45M 35.35M Tires SYNA Synaptics Inc Nasdaq 32.19% 33.04M 34.11M Software & Programming EBIX Ebix, Inc. Nasdaq 32.10% 27.14M 34.78M Computer Networks <!-- google_ad_client = "pub-1641527371507802"; /* Financial */ google_ad_slot = "4718314016"; google_ad_width = 728; google_ad_height = 90; //--> google_protectAndRun("ads_core.google_render_ad", google_handleError, google_render_ad);LPHI Life Partners Holdings Inc Nasdaq 31.95% 7.32M 14.91M Insurance (Miscellaneous) BYD Boyd Gaming Corporation NYSE 31.94% 54.21M 86.23M Casinos & Gaming CCME China MediaExpress Holdings Nasdaq 31.33% 11.25M 34.29M Advertising OPEN OpenTable Inc Nasdaq 30.88% 16.22M 23.02M Software & Programming TZOO Travelzoo Inc Nasdaq 30.87% 5.53M 16.44M Computer Services TXI Texas Industries Inc NYSE 30.24% 17.42M 27.81M Construction - Raw Materials QSII Quality Systems Inc Nasdaq 29.92% 19.15M 28.96M Software & Programming LNET LodgeNet Interactive Corp. Nasdaq 29.89% 15.47M 25.09M Broadcasting & Cable TV ADY Feihe International, Inc. NYSE 29.70% 7.54M 22.30M Food Processing SOMX Somaxon Pharmaceuticals, Inc. Nasdaq 29.52% 31.41M 35.42M Biotechnology & Drugs DMND Diamond Foods, Inc. Nasdaq 29.44% 21.20M 21.98M Food Processing ALGT Allegiant Travel Co Nasdaq 29.21% 14.56M 19.00M Airline ARNA Arena Pharmaceuticals Inc Nasdaq 28.95% 119.99M 121.41M Biotechnology & Drugs FSLR First Solar Inc Nasdaq 28.79% 55.45M 85.72M Semiconductors CALM Cal-Maine Foods Inc Nasdaq 28.78% 12.89M 21.45M Fish/Livestock CIEN Ciena Corporation Nasdaq 28.59% 90.97M 93.57M Communications Equipment PFCB PF Chang's China Bistro Inc Nasdaq 28.15% 22.57M 22.96M Restaurants SNIC Sonic Solutions Nasdaq 27.99% 46.22M 48.81M Computer Networks SFI iStar Financial Inc NYSE 27.93% 83.00M 92.32M Real Estate Operations WRLD World Acceptance Corp Nasdaq 27.92% 14.74M 15.65M Consumer Financial Services WTI W&T Offshore, Inc. NYSE 27.88% 34.70M 74.63M Oil & Gas Operations RAX Rackspace Hosting, Inc. NYSE 27.87% 96.59M 126.12M Computer Services ESI ITT Educational Services, Inc. NYSE 27.75% 27.65M 31.92M Schools MELA Electro-Optical Sciences, Inc. Nasdaq 27.69% 24.09M 25.25M Medical Equipment & Supplies BIOD Biodel Inc Nasdaq 27.56% 21.24M 26.39M Biotechnology & Drugs
They've tried to heal the economy from the top down and it didn't work: Banks did not dispose of their toxic crap, they took TARP money and didn't help homeowners. They are in a big rush to foreclose and resell at a loss so they can charge The Taxpayers for the losses before the ether wears off. Why are The Taxpayers helping the Banks?
Maybe The Taxpayers should help The Taxpayers: Start from the bottom up, despite all the opposition to helping underwater borrowers. Because they didn't cause the housing market to drop, on the contrary, they were part of the rise higher. Look, there are parts of historic West Palm Beach, FL 33405 that have lost 25% of their value in 2010 alone! On top of the 40% drop from 2007-2009. The number of strategic defaults can only rise in the future, so why not some TARP money for homeowners?
If the TARP money for the banks was to cure their RMBS problems, then why didn't it flow (in reverse) all the way down to the homeowner? (Maybe because the bankers couldn't pay bonuses that way?). What is SunTrust doing with the $5 Billion it still has from TARP?
As painful as it is for most of you to give money to underwater borrowers, these are better people than The Banksters. Start at the bottom. They will spend money again at Home Depot & Lowes, who will hire more workers. Many independent contractors and small businesses rely on the home improvement sector, can you imagine the "upward- cascading effect" this money flow would produce? Painful as it is, Mr. Responsible, whatever business you are in, it would benefit from this plan.
Defaulting homeowners, if cured, would put money into the economy FASTER than The Bankers. Ouch.
P.S.- This can be done without the "help" of The Courts, think FNMA & FreddieMac.
Giving money away never works ... and especially in this deflationary period. It didn't work for the banks and it will not work for the homeowner. The only rational thing to do is deleverage and hoard. The lines at Home Depot will not grow if every homeowner gets a wad of cash. I think they may have learned their lesson about putting money into their home and are now fully committed to 3d movies, flat screens, fantasy football, ipad upgrades and guns.
Well, the cash would go straight to The Banks to buy down the underwater part of their mortgage, and the assumption I make is that they will begin to pay again on the rest of the mortgage. The Banks still end up with the money. Solves more problems than just giving money straight to The Banks as they are now.
Giving away money will work. The losers are the ones who either are unaware of what is going on or too busy complaining to take advantage. Get with the program!
As usual Leo...you win, we are all bullish here...on PMs.
Your whole post hinges relies on this statement:
"... but the fact remains that there are powerful interests that want to see this rally continue as long as possible."
SIGH
Leo, nor anyone else has any idea how long the 'powerful interests' want this fake rally to continue...they may be done with it tonite. After all, what good is it doing them as 30 weeks tic by with insiders selling and equity outflows? Leo doesnt know...and remember this is the guy who said load up on solar stocks before they collapsed.
Oh, I'll never forget that; they endless ranting about the chinese solar panel stocks. It was funny. Thank God there are no pension fund employees involved in my life.
The fact that you dismiss that statement proves to me that you are not willing to understand that there are powerful interests that will stop at nothing to keep propping up the financial system. It doesn't mean you can't short the market or individual stocks, but if you're waiting for total systemic collapse, you'll be disappointed.
So the "powerful interests" can force the market higher but get raped on their PM shorts? Why not have it all and pump the S&P while keeping PM's low if they can do ANYTHING.
if you're not looking for systemic collapse, you're going to be surprised
I agree. As long as the TPTB want to print and buy, the bull market will continue no matter who else gets hurt. Is there a scenario where it is in their interest to change their mind?
???
"the bull market will continue no matter who else gets hurt"
Bicycle man have you noticed the SPY today is about were it was 12 years ago?
After a 70% plus fraudulant illigal manufactored Fed induced Rally? After a 30% decline in the dollar? After inflation has doubled the cost of living for most of the US population? There clearly is no fucking bull market other than hard assets and commodities.
The dickus is with you Leo. The only people that get hurt are the usual suspects, plus a few moralizers on zero hedge. The lack of participation buy the moralizers will only hurt them. I use zero hedge to make money. I don't give a crap about things I can't change.
"The fact that you dismiss that statement proves to me that you are not willing to understand that there are powerful interests that will stop at nothing to keep propping up the financial system".
Leo,
Apparently you are willing to dismiss the fact the SPY is flat for the past 12 years. The powerfull interests continue vaporize Trillions in their effort to control, contain, and obscure the financial disaster that their own failed policy has created. Buying into the illusion is one thing, selling it to others is another.
the vaporization of trillions doesn't cause inflation, but it might prevent deflation.
When a POTUS leaves his powers to a prior president during a press conference, you know things aren't as rosey as they seem.
start @ 9.50 m
http://www.youtube.com/watch?v=6Ac9uDLUdSs
Since the Put options have been written by banks, and the banks want to make a profit, do you really expect the market to open next Friday at a level where the Put options are in the money? (If your answer to this question is "Yes", please read up on max pain theory.)
After that, though, watch out...
There are LOTS of put options for friday's option exp day, SPX strike 100-105. Watch out
this has been a great time for a put spread. Put spreads bitchez!
Your killing me. Xmas rally, really!?!? We've straight lined up since July.
The market bottomed 18 mths ago (an important bull time range). This rally is a house of cards. Wake up one day with a down 5% open is not out of the question. Hedge accordingly.
Max yep sooner rather than later, the 'rally' is suddenly over, leaving the bulls trapped far higher. Anyone who thinks 'this time its different' is a damn fool.
No, we haven't - there was big drop in August, some calling the turn and then another drop at the beginning of November (where I thought the turn might be happening - I was wrong). However, the point applies - we have NOT straight lined up (in the stock markets at least) since July.
Am I bullish - no.
DavidC
To TruthinSunshine, you say that you don't understant why Leo has a platform here on ZH. You say this because you probably feel unconvenient since Leo's saying is against your believes. But that is just quite unintellingent approach to subject. If you see otherwise, just depate with him but with manners, not just trying to ban Leo because he doesn't belive to same god as you. You should see deeper what Leo is saying, he sees problems in the economy as most of other ZH readers, but is still bullish for equities, and one might say that for the reason!
I say quite the contrary that I really apreciate ZH (Tyler) gives platform also to contra views, that's showing some great self-esteem about themselves.
Regarding the VIX (referring to Leo's post), if you look the VIX past 20 years, there has been long periods where index has stayed under 20 (like 90-97 and 04-07), so as Leo says I also don't believe that everytime VIX hits under 20, there will be a major sell-off. As Leo puts it "it could go lower and stay there for a long time".
About my views overall, I'm quite bear on the long run and sharing lot of same views as ZH blog, but still I'm at the moment bull (has been from 2009), as I can't rule out the all central bank's, large banks, large institutional investors and government's efforts to lift the markets. All of them need the market go up. Don't underestimate their power.
Personally, I'm long on some index futures but hedging my position with selling some out of the money calls (short and longer maturity). I can't be so much long with equities directly (having some for dividends and some lottery tickets..), as I'm working in the financial indastry, so if shit hits the fan I couldn't be out so quickly but I can do that with index futures.
So, to summarize, thanks to Leo for the post, I appreciate your views, and also thanks to ZH as I very much like to read this site.
Leo still hasn't made much of a case why the stock market is still on the upside; that is Truthinsunshine's point...
I would appreciate his "bullish" views more if there was more rationale to it than hopium and blind gambling...
on Sun, 12/12/2010 - 11:38
#800096
Leo still hasn't made much of a case why the stock market is still on the upside; that is Truthinsunshine's point...
I would appreciate his "bullish" views more if there was more rationale to it than hopium and blind gambling...
That was EXACTLY my point. Homer, you get it, as well as some others.
I'm not flaming Leo, I'm not trying to get him "banned" (I wouldn't try to get ANYONE, no matter how vile they are, which Leo is not, banned - that's what makes ZH great - I LOVE free speech even when I don't agree with it more than anyone), and am not doing anything other than asking for some facts to support Leo's broad and simplistic statements about where he claims the market is going.
Leo has thrown out some broad statements with no underlying support whatsoever except for:
"We are not out of the woods, especially on the economy, but something tells me the stock market will continue climbing the wall of worry, much like it did back in 2004."
-And-
"I remain bullish and no matter what they bring down the road."
- in his response to my criticism.
Wrong! I understand global liquidity flows and the shadow banking system. Do you have ANY idea how many billions are flowing into the market every day from large global pension funds, wealth funds and mutual funds? Do you know that the top hedge funds are bullish and scooping up shares? The stock market is not the economy and the Fed will do whatever it takes to prop up markets. This is my belief and I stand by it.
Market is definitely getting overbought. Pretty typical to have some clothesline drops to wipe out the mountain of calls that have built up.
But the 50-day should hold.
Fact is Robo, this time when the market gives, nothing will hold.
Wanna bet triple witching will leave call buyers smoked this week ?
How can the market be overbought when money is continually printed and spent on the market? Do technical indicators mean anything? How do you define over-bought?
Yes ... since the FED embarked on its pump, there have been definite and very short consolidation down moves, manufactured by the absence of the pump. In this market all it takes for a dip to occur is for the banks to stop buying (ala 5/6). The periods of non-buying are timed by technicals (support levels, 50 dma, 200 dma, bolinger lines, fib points, head and shoulders, overbought, etc) in order to further maximize profits. These guys are real smart about making money and they don't leave a trick unused. They trade with our money (future tax revenues) and time their trades with technicals.
I have been trading the ES market almost continually since 1999, and have seen the dramatic shift from chaos to order. The banks must have (or create) order to maximize profits ... how else do you think they make money every day for an entire quarter, yes 100% of the time. Order must be maintained and now they have the money to do it. This bear market 'rally' has been a continuous story of failed technical bear indicators. I should know, I am one.
"But the 50 day should hold" ... That is a beauty
But the August "pomo" rally is a clear and obvious fraud. More clear and obvious than Dot com, the Savings and Loan Crisis, Housing Bubble, Madoff, Enron, ..etc
It "should" eventually be exposed as such. Just like every other market rally the past 12 years this one "should " give it all up as the revelation that fraud is not bullish for the markets is once again realized.
This time "should" be no different.
El Hosel, can you believe the new conventional wisdom is the fraud continues forever uninterrupted? These people are utter fools.
SheepDog,
No, I can't believe it... Its like WTF are you people looking at that makes you "bullish on this garbage". Yeah, you can go ahead play the game, capitalize on the mess but there
is nothing bullish going on here...not even close
Agree that market is overbought, but that counts for less with the low volume, which actually makes it easier for a conspiracy of hedge fund honchos to manipulate it higher.
I have been rereading some of the older texts, like Reminisences of a Stock Operator, and what I think is happening to the Indexes is what used to happen to individual stock "pools" manipulating an individual issue. The hedge funds have BECOME the market and can make it do what they want, at least for periods of days or weeks. It may be that the old adage about the market being so big that no individual or even group of individuals can manipulate it has been proved wrong. If enough hedge funds talk to one another and decide that they want their numbers to look good at year end, they have enough buying power collectively, given that volume is so low and so many other participants in equities have been driven away (e.g. mutual funds and private investors), to "control" what the market does -- assuming no headline news our of Europe or North Korea. I'm not saying it's totally risk free, but I wouldn't be surprised to see the ES move higher, though all those gains will surely be wiped out after 1/1/11
I really think that is what they have done and they have telegraphed the news to the small investors. This is a rally for the patriots. All those who want to save the system for this generation need to ante up now. We need a rally and "they" are going to do their best to deliver, even to the point of telling us peons that the make is on!
"but something tells me the stock market will continue climbing the wall of worry, much like it did back in 2004."
And something tells me that when the Big Kahuna hits, it will make fall 2008 look like a potty wave.
“Santa Claus Rally”
oh! Sorry.
I was looking for the Tooth fairy.
Dear Tooth fairy:
I will no longer accept paper money in exchange for my teeth.
Please leave gold coins.
Thank you for your cooperation.
I believe Santa (aka Benny boy) will still accept paper money.
Merry Christmas!
twittering as stocktradr
No. it's going to 1300 area, in this round.
Fundamentals don't work. Technicals don't work. In this market the only thing working now is buy the dips. http://www.youtube.com/watch?v=jllJ-HeErjU Sorry about the language but I finally gave up my time tested mechnical method as nothing is going to work except buying the dips when every central banker in the world is pumping the markets. If they don't alot of governments fail, civil unrest and wars break out. They literally see that the markets must go up to save the world. If you want to fight that go ahead.
"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." -- Mark Twain
Central banks are not "pumping the markets", it just ain't so. They are propping up the banking systems, a totally different animal with some connections to the markets. The transfer of liquidity from banks into equities and commodities is wildly inefficient, but so far it has resulted in upward momentum.
There are fifty players and events that could break the magic spell, the correlation, the "buy the dips" mantra. If you can think of 25 of them, you're a genius. Buy the dip, pull the lever, spin the cylinder, what's the difference?