Here is my email to a trader friend on 1St January
Anticipating likely move is one of the key to successful speculation.
1/03/2007
What a trap
The traps in market are always well planned and executed. You have to constantly anticipate where the likely traps are. With so many people embracing the beginning of year rally and markets in Europe and Asia rallying, it was perfect set up for a reversal. The hints were in extreme readings on short term sentiment indicator and so many gaps today morning. With so many trapped on wrong side expect some panic in the market. And I hope you got in to QID.
Here is my email to a trader friend on 1St January
Anticipating likely move is one of the key to successful speculation.
Here is my email to a trader friend on 1St January
Anticipating likely move is one of the key to successful speculation.
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32 comments:
today may be QID's biggest volume day
It will be fun reading about all the conspiracy theories about today.
FOMC minutes came out, but i havent reviewed them...
You can find many reasons for it, but that does not matter. When everyone gets so bullish, you have to be skeptical of any move.
I had so many mails in last 2 days from everone sayng, they don't want to miss out on the big move this year and I told them watch QID for big move.
I will have a bigger piece on this sometime day end or tommorrow.
I like the brokerages short... also wondering - this is where i always get messed up - about when to enter positions... if there is big gap down, i may want to be in what i deem to be good short positions tonite... otherwise i would wait till tomorrow morning and wait for early morning volatility and "cofirmation"
we'll see
Walter:
I prefer to wait and look for low risk entry. The move is not going to end in a hurry.
Probably no one will believe me but sold the top of NQ and still carrying part of the position.
There is lot of panic currently, so expect a bounce sometime in next couple of days. That is when shorts will be more profitable. Too much panic is buyable.
It turned from a lot of profit taking to all hell breaking loose after the report. There's no consipiracy. Just a reaction to news in a profit-taking enviroment. Two bearish edges in a row.
the panic at least woke up the comments section today...
Implied volatility went crazy. We're near a short term bottom. Looking for long entry.
short term bottom until tomorrow morning?
There might be bounce, but I am expecting more downside. Market need a extreme sentiment to go up like in July when Economist had a bear on cover, when bears were gloating. Plus earning season is about to start so aggressive buying before it when market is already up without correction looks unlikely. IMHO.
That was clearly a short term bottom.
totally agree on short term bottom...
i guess that's "micro" short term when you talk on the scale of 10s of minutes and hours...
otherwise i think a few days when i hear "short term"...
no big deal, just kidding around
and a intemediate term top
Need to see declining stocks get a lot higher proportion of volume in market if really going to go signifcantly lower. So far market shying away from giving decliners that kind of attention. Can't rule it out just yet though...
There is "profit taking" on the short side.
That does not look like just profit taking but legitimate buying right now.
considering the equity markets, anyone have any ideas how to play long term investments in mutual funds at this time/juncture?
i think REITs have to be topping... emerging and international stock funds will probably be good i am thinking... but lets just say for sake of argument, if we believe US markets at or near top, why would i put money in US funds right now?
Emerging markets might be topping out. I have a post coming on India market sometime today/ tommorrow based on my New Year greetings indicator. China is parabolic, we know what happens when markets run like that.
That is fear right there, "if we believe US markets at or near top, why would i put money in US funds right now?"
Don't buck the trend, especially in the long term.
Glad I am long NQ.
f - i did mention "for the sake of argument" so for the time being so please withold judgement on that - this is just exploring scenarios...
not all black and white...
interesting article on lazy portfolios here:
http://www.marketwatch.com/News/Story/Story.aspx?guid={DB2FE1FE-444D-4D59-AF7B-3BF006881A2E}&siteId=mktw
Not sure who got trapped but I've done nicely today on my long positions. No complaints here.
damn, talk about china and parabolicism - chart of FXI - that thing is parabolic even on a semi log scale!
Walter,
Did not mean to sound judgemental. Tops are likely when the distribution of opinions is in a tight range such that a change of opinion has a tidal wave effect. Read different blogs and you see quite a broad distribuiton of opinion continues to exist. When opinions vary, the status quo (trend) generally continues. I am not a long term player so not enough DD into mutual funds. Sorry I could not be of more help.
Looks like the minutes combined with the GS announcement about commodity prospects, to me. Three down days is a short-term "buy" signal on the indices, SPY included. That said, no major trendlines were violated by the action today. I think Pradeep has a valid concern about earning season and the hesitation there, but I think the hesitation will work both ways, keeping us out of a selloff and out of a buying spree.
Several, heck, most, of my stocks were up today. I took a hit on the AKAM long initiated today, but it's a small position, and KFT initiated today was about even. Overall I was up today, a good start for the new year. And my wife has FXI in here IRA.
Anything can happen in the market, but at this stage the risk is very high for entering new long positions. In fact there are tons of shorts on my scans today. Long to short ratio on my scans is 121/163 whic is rare occurence. Plus my other short scan, which rarely gives signals has 6 stocks on it after several days. Rallies in some sectors are confirmed over and they can be shorted without a risk of whipsaw now.
Good point. When the market feels comfortable heavily trading declining stocks, we will see longer term selling. The volume just isn't there yet to merit big longer term traders selling because they would drive the price down on themselves. So far the trend has been to lessen the volume in decliners as the indicies get lower. That will have to change if a major correction is at hand. Of course, this change can happen in a matter of hours/days so your guess is as good as mine. Until declining stocks welcome sellers with volume, I have to remain a bull.
Walter,
What do you think about RACK as a short?
on the chart, at least, it looks like RACK could break either way... hard to say at this point
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