Yes, you have to buy any dip greater than 10 points. We got a 20 point dip this morning, and the buyers snapped up the shares voraciously. Downgrades in Europe don't matter. That is yesterday's news. A Greece default won't matter, past a day. Europe is a basket case, and the market has put it into the corner, quarantined it and deemed the rest of the world contagion proof and it's all OK. Yes, even China, now that the Chinese government wants stocks higher. This charade can last for several weeks. I won't say several months because the S&P is already near 1300, there just isn't a huge amount of fuel to take this thing higher. The herd is already crowding into US equities and shunning everything else.
Monday is a US market holiday, and it looks like derisking ahead of the long 3 day weekend. Look for them to re-risk when they come back on Tuesday.
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13 comments:
Today's pullback is well within the range established from the first trading day of the month. Its a one day event. Next week the market will resume its uptrend and downside wont be coming anytime soon.
I disagree completely.
The first move lower is always bought heavily. Sheep to slaughter.
We will continue lower thru next week. Options expire next Friday.
The move lower MIGHT even continue the following week...then we bounce higher into month end.
It's the same old song and dance. We have done this a million times.
Financials led this rally higher.
After jpm earnings things don't look so rosy. People were expecting much better.
I'm not the only one expecting a bigger pullback soon..
By Helene Meisler
| Jan 13, 2012
| 1:53 PM EST
The Index put/call ratio is currently around 75%. The total is at 65%. This is very low. It tells us there are an awful lot of folks buying the dip.
The good news for the bulls is that it will help the ten day moving average of the put/call ratio continue to tick down. The bad news is I have rarely seen such a low Index put/call ratio that does not result in a sharper pullback than we've seen so far today.
First 2 weeks of January are typically like this on low volume, managers accumulating positions, etc.. Then comes op ex. When markets are at 3 month highs in January going into op ex, historical returns into month end have been horrendous.
www.tradetheodds.com
The fund managers were very underexposed to equities by year end and you are seeing a reallocation to equities in the first 2 weeks. The fund managers are still underinvested, that is why you see a dip in the morning gobbled up by investors even when the news seems bad.
Today, you ended up at intraday highs, and tacked on another 5 ES points from 4:00 to 4:15 like it was nothing. A flat out FU to the longs selling their holdings at the cash close and the shorts holding overnight.
Or there too many shorts, and it squeezed midday into the close. Many shorts covered. We've seen this story all too many times at tops.
...especially on a low volume friday afternoon
Dawg,
How much does the overall market adhere to breakout rules.
I see the spx broke the high of 1280 set in end of October.
If that's the case, shouldn't the next top be much higher now? Shouldn't it be like 1350 now? Like in July?
I would like to be in TVIX in the next top.
The market doesn't always follow breakouts. Individual stocks have a higher winning percentage following breakouts than the general market. I think VIX will remain low till the fall. There will be occasional spikes, but the volatility is going down like it usually does after a shakeout.
1550 by 1/13. triple top on the spx dawg.
Then 2/13 we hit the second leg of the great depression. All downhill from there.
Get long for 1 year starting from now. Then get short for the next 3.
CAT is trading like a high flying tech stock.
It is up 50% in just 3 1/2 months !!
Not bad.
I wish I had bought more ORCL on that pullback.
An easy and quick 12% so far.
Should return to 33+ this year.
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