With the April 15 tax deadline, and monster capital gains for stock investors in 2013, was April just tax selling to pay for all those gains? Some of it is tax related selling, but most of it is hedge funds that had too many momentum stocks in their portfolios and sold in order to stop the bleeding. Having been burned so bad, they will not jump back in the same names for a few weeks.
The emerging markets performed quite well over the past sever trading sessions, despite the intense selling. Without a weakening emerging markets, I don't see this American led selloff with much legs. It could take us down to the SPX 1800 area, but I don't see this selloff taking us to the February lows. Or even in that vicinity. I would be quite surprised if the SPX went below 1780 in April. At the same time, I don't expect a sharp rally anytime this week.
Staying neutral in stocks, staying long Treasuries, and keeping power dry for a potential short or potential long. I will play short at ES 1834 and long at ES 1780. Rallies will not have staying power, probably last at most 2 days.
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2 comments:
Hi MO, I am learning technical analysis.
1. Which indicator do you think is the best for spotting trend reversal?
2. What do you think of the effectiveness of Bollinger Bands plus Japanese candlestick?
Thx.
The only thing that I pay attention to is horizontal support and resistance, which is areas of high volume and number of hours traded in a certain price zone.
I don't do technical indicators or trend lines. I find most of that to be of no help in predicting the future.
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