The institutions couldn't wait to buy ahead of holiday seasonality and the futures have ramped up 1%. Above 1100, the buyers are hesistant, and I don't think that's going to change this week. Last week's pattern was that of an upside down U. I believe this week's trading will be shaped like a U. Unlike last week when we opened around 1100 after gapping up 1%, this time the market has already failed at breaking out above 1100 so today's action should be quite different than last Monday's.
The market still has not worked off the levels of optimism over the past couple of weeks. With the general complacency and lack of fear, I don't see any strong squeezes higher. I would be surprised to see a gap and go move today. Today's project is for the market to sell off during the first half of the day with heavy resistance right above 1100.
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7 comments:
Are you still short dawg?
Getting a little squeezed here man.
I didn't expect a big ass rally like this one. Haha
Yeah dawg.
This action here at the top is definitely different than the last two tops we had.
Also, it's the end of the year.
Also, the economic news is at the least half good.
Also, there are always more bulls than bears always.
And lastly, too many people lilke you and me dawg who are naysaying the rally.
Shiet... I think we can go to 1150 now.
I'm gonna look to cover my EDZ when I get closer to break even. I should have covered last week.
I know what they're doing. Simply keeping the market in the air, not letting it drop, till the economic news is good. Giving themselves any excuse to take it higher.
Also, I just looked at a 2 and 5 year chart.
We fucking went up big from 666 in March, and we've been hanging up around here the whole time.
It just looks like we're gonna base to go even higher man.
I'm gonna have to reconsider this whole getting short thing.
At this point, I say there's a 50% chance market goes to 1300 man.
Basically in a straight line with little 50/60 point pullbacks along the way. That's what the chart shows.
I am short and I think we are forming a broad top. Small caps have underperformed, the dollar has not made new lows despite all the bears in it, and stocks are expensive with supply coming on quickly. I seriously doubt that we go higher from here. The year end rally buyers have front run the rally and already bought this month. I am still bearish.
How do you know that the year end buyers have already bought and front run.
I thought there is a ton of cash that left the market in the beginning of 08 and never came back.
What about all the retail people?
FYI, I own TAMB and PCBC.
These are two little rinky dink banks that people think are gonna be FED owned.
Basically, if the bank is not like C or BAC, or JPM, seriously, people think it's gonna go into receivership.
That is because 8 out of 10 of these little banks took huge writedowns of their NPL's and wrote off other shit. They also expensed goodwill a lot of them.
Basically all of these little banks have again reported negative earnings for 3Q.
As a result, all of these little banks are trading basically as if they're going to fail.
Which I know is impossible.
Just so you know, I think there is gonna be a huge rally in these junk small cap little banks. 2nd and 3rd tier banks which are obviously considered small caps.
A lot of these are going to double and triple or more because they are literally like 50 cents right now. This should boost the Russell.
The retail crowd is not back in stocks. They have been burned twice, in 2000 and 2007. They will stay away for a while. The hedge funds have been driving the rally, going from short to long from March to present. They may gamble that we'll go even higher but they are weak buyers, they are always the first to sell when the crap hits the fan.
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