Thursday, July 7, 2011
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2011
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07
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- US Debt Mountain
- Intraday Upside Seen
- A Day to Buy
- Debt Ceiling
- Thinking Long Term
- Fewer Posts
- Give the Market Its Due
- Market Feels Heavy
- More Can Kicking in Greece
- Europe = Punching Bag
- Closing In on a Sell
- Gap Ups Steal RTH Move
- Trend Down Day
- Market In Trouble
- Gold Bubble Is Simmering
- Always Fade Fast Money
- Very Weak Market
- Fast Money Bearish
- Ratings Agencies
- GOOG
- Looks Like a Bottom
- Overnight Volatility
- Watch 1296
- What a Reversal!
- QE3 Reflexive Buying
- Unsettling
- Rally Sold
- Europe Panicked
- Those Last 15 Minutes
- No Heroes
- Not Totally Sanguine
- Hedgies View
- Rising Consensus
- Still Not Shorting
- Europe NOT the U.S. is Japan
- Ahead of Jobs Reports
- The Pullback
- Shallow Dips
- Get Ready for Low Volatility
- Gap Down Signal
- Incredible Hulk
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21 comments:
Your comment appears to be contradicting your comment from yesterday, where you believed that a good ADP number could be a capitulation of shorts fighting this rally. Now you're saying there's a lot of traders getting short, as if they are starting a new position. Huh?
No, if you read my comment closely, I mentioned about nonfarm payrolls, NOT ADP. Please learn to read before you criticize.
That wasn't criticism, just asking for clarification. But I now see what you're saying.
Pain trade is higher into the end of the week, with shorts capitulating after a strong nonfarm payrolls report tomorrow. Euro is squeezing shorts bigtime rising 1% in 2 hours. Bears are between a rock and a hard place right now.
Crude oil and energy complex is solidly bid. I agree, don't see much selloff today in the matrix.
Another 1-2% move up on the s&p, the rubber band will be nicely stretched tho
ES 1355 is an area I am looking at for a good risk reward short. If we get a good nonfarm payrolls number, we should hit 1355 and I'll probably go short for a trade.
in fact so far we are just backtesting the broken trendline on the daily chart.
as well everybody is expecting new high..
We had exceptionally high short interest going into the Greek squeeze. So high that it's taken nearly 2 weeks to work off and it's still not done yet. Shorts heading into tomorrow's NFP are caught in a dilemma. Hold and possibly get reamed again with no firepower left or cover and miss the pullback. After tomorrow's #, many will try shorting which adds fuel to a longer uptrend into mid month and possibly August while the good news earnings come pouring in.
Covering early and not participating in the move hurts much more than losing.
Yes, true, missing much of this rally hurts but at least you aren't banging your head fighting this rally by shorting this monster. Just BTFD. Even if its just 1%.
1% is a big dip now. I'd always thought it was a solid rule to in an uptrend be either flat or long or in a downtrend be short or flat. Why would you bet against the trend which is being carried by fundamentals (as opposed to near-sightedness) even for a trade?
By the way, nonfarm will likely surprise to the upside. Surprises tend to trend very well and right now they're trending upwards. In general markets trend along with surprises trends (because economists are always in the process of revising forecasts in a cyclical fashion).
Some people say the charts show fundamentals first, I say it's the other way around, but you have to look at them broadly.
This has clearly been a market in denial. Today is really the first day that I've seen a solid uptrend (still waiting for that new intrday high but pretty confident it will happen in a few moments). There has been NO upside without fundamentals forcing the hand of underinvested fund managers who would like to keep their job and realize it's going to be hard explaining being underinvested with these numbers.
I'd get more bearish after some solid days of trendmonkeys getting excited over no news. And even that can last for more than a month as long as the fundametnals keep supporting the trendmonkeys. Then even a 0.5% dip will be a lot.
I mean the reason why this squeeze persists is because shorts don't want to cover and fear missing a significant pullback to profit from. Then this horde of people who are significant go on revenge trade mode. So even though they short cover, they get right back in, a mirror of bottom pickers in a bear market. It's a persistent cycle that we saw in 09 and after QE2.
There are 2 buyers for each sale. A guy getting long, a guy initiating a new short, and a 3rd guy covering his shorts. As long as the gloom is being sold to the masses, shorts continue to replenish. The short is outnumbered. This is the basic way markets move and vice versa when 2 sellers outnumber 1 buyer when market peddles hope.
After today's ADP number, even if nonfarm payrolls surprise to the upside, I don't think it will squeeze that many shorts. I don't see a repeat of today for example on a strong nonfarm payrolls. I would fade a gap up tomorrow if we are above 1355.
I don't think I've ever seen a squeeze persist this long. I've seen larger quick squeezes intraday to a few days but this is just torture for shorts.
I would short the close if we pass 1355 today. Something tells me when all is said and done after the NFP release, markets are red and u may not have a chance to get in. Marketowl, have you noticed that the algos ahve been pricing in events a day before now. They frontrun the first day of the month effect, they frontrun greece. they front run everything
Yes, I've noticed that. Patterns that I usually rely on in the past have happened a 1/2 day to 1 day earlier than I expect. The algos have gotten smarter and like to jump the gun. The end result is retail traders and late fund managers left holding the bag at inflated prices. But no, I will not go short overnight. And it looks like 1355 is too low the way this market is squeezing the shorts to no end. Maybe 1360 now.
I would say - that is it. amen...
If you did not lose money this week, consider it a victory. Most shorted and got a new hole drilled in their back.
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