We have consolidated for 4 days between 1260 and 1280, building up a wall of optimism to tear down. The wall was complete with the nonfarm payrolls report, which all the shorts were afraid of shorting ahead of. So now that the good news is out of the way, it will be a free fire zone with Europe as the main course, with China weakness on the side menu. The cat is now out of the bag: the US is the last one standing. All the fund managers are crowding in to the US long equities short Europe/emerging market equities trade. This trade can go on for quite a while, since it has only recently been mentioned.
I expect next week to test the bulls, with a sharp pullback which shouldn't last more than 3 days. Best trade is probably to buy that pullback as the money flows will support US equities for some time to come as it sucks away institutional money from other parts of the world.
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13 comments:
Retail stocks seem to be coming in mixed.
I live in the North East. So far NO Snow ( i hope i didn't jinx it).
I think winter sales are horrible. No one buying the cold weather gear.
No shovels or snow blowers.
This stuff usually gets marked down come Presidents day, to get ready for spring stuff.
Only 6 weeks away.
Monday will be a big up day and will hold in the upcoming days. The market is flagging and euro will squeeze...no brainer ...
MO, what's your call with today's action? You think this train might run a while or you still expect downside?
Market feels tired after this rally but I still think it will hold this range for this week. For tomorrow I expect a minor dip.
I am expecting downside soon. Probably next week. SPX 1300 is a very strong resistance level.
All the "smart money" is expecting downside, even institutions as they have been hedging index with puts bigtime yet no fall (yet). Retail is bullish but the retail crowd is small. We saw this in fall of 2010 when "dumb money" was bullish but the market continued higher. Why? cos the *size* of the smart money is the large herd. retail is a small % of market now.
Excellent point Anonymous....
everyone's very bullish.
Time for a pullback. Probably last thru next Friday, when options expire.
Everyone is waiting for a pullback to buy....
exactly, thats when you get clobbered.
Who defaults next Tuesday? Europe will be in the news , again.
You are right. Stay out of the market until the EU problems, Iran,
China hard landing and US debt issues are resolved...
7 1/2% straight up since the 19th of Dec.
3% so far in just 12 days.
Hate to say..this pace won't continue for the rest of January.
No use of broad ambiguous statements….Its Cramer like…
“Market will crash “…Inflation is coming” etc…Must be able to position for tomorrow otherwise futile..
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