Now we can finally forget about the Greece headlines and get back to fundamentals. This market is 3 weeks from the bottom, so that is still not enough time for me to be comfortable shorting this market. I believe we are forming a long term top, and it will be better to be a seller than a buyer for most of this year. The question is when do you short. I am waiting to see a better setup to get short, the bull crowd has not fully migrated back to their maxed out positions.
I am considering shorting USDJPY instead of S&P because it does look like the weaker of the two risk on markets, and I believe the yen is massively undervalued based on PPP and money supply. Also, the BOJ and Abe don't seem to want an even weaker yen here, and the rhetoric has toned down. I see a USDJPY short as being a better place to be than S&P, especially if I don't time the top correctly. Bullish Treasuries at these levels, looking for an entry point today, unfortunately we are gapping up hard off the weak close on Friday.
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I was waiting for the market to start flushing down today. It didn't happen. There is an underlying bid in the market and I can feel the bulls just crawling all over the place like cockroaches. I think they are waiting for this market to get to 1150 or even 1200 and just jumping at the chance to buy on any dip.
So after the dips didn't keep dipping I sold the 212 puts at 6.40 and made a little chump change.
I then bought BCC @ 35.32 and sold at 36.19. Then I shorted TSO @ 92.63 and covered at 92.18. Then I bought GPRO @ 44.16 and still have it but just an initial position. I may dump it at even because I realize GPRO may not have a bright future.
Next play is either see what BABA does at 82.81 if it gets there or stalk the SPY short at higher prices. Somewhere this year the SPY is going to print 198 or lower.
The interest rate trade is baffling me. I think the rates are going to go up north of 2.5% for sure very soon and I'm not so confident of holding bonds long except for day trade. If somehow TLT gets back to low 40's or high 30's that will be a fat trade for sure.
Been playing in this game in 3 decades and have seen all the tricks.
-Ol DAWG
It will be an interesting March. Should be an inflection point for stocks, not sure if that means bonds go higher or lower, because Fed is probably dropping patient language at March Fed meeting, Either way, I think we have a top in the stock market in the making. Top should be sometime in March.
Also ever since 2008/2009 a new breed of perma bears were spawned and called a correction every year since. Since 2010 these bears were proven wrong each time and a new breed of perma bulls are born in the mean time. People who have played the market in the last 5 years believe the markets will go up for ever. Lots of people thinking markets are just going to go up without fail each time and just BTFD 24/7. Just like the perma bears were used as suckerbait to run the market up the last few years, these BTFD fuckers will be used up for longbait and flush the market in their face. Wonder how long that could take.
Just look at the S&P chart from 2000 or 2007 to get an idea of how a major market top trades. This is another major market top in the making. The trigger will be weakening economy, which is aready happening, which bulls are ignoring. I could care less about Greece, China is in a slow motion crash and the US economy is slowing, don't believe the cheerleaders of number of jobs ( mostly part time) as labor market strength.
2008 was a special case. So was 98 and even 2001 2002. What would trigger similar economic conditions now as back then.
Sold the GPRO lost 19 cents dog with fleas
So we have 4 special cases, according to you, in 17 years. That doesn't seem too special to me. The economy actually had much more potential back then, with better demographics with more easing potential from central banks.
This economy is not self-sustaining, and buybacks fueled by bond issuance is not a long term sustainable growth driver for EPS. Anyway, I don't even need to look at the fundamentals, the charts scream top to me.
I agree with you that this market is just pe multiple expansion driven. Stocks have the highest valuations for the s&p ever i think. But the nasdaw companies actually have tame pe's compared to 99 and 2000. I believe we will correct but the economy would have to contract for a crash. I think that could happen next year.
Spx will go to 2500 at least in hurry. Bears will be crashed. Muhhahahahhha.
Yes, the economy will have to contract for there to be a crash. I don't expect a crash, but a deep correction is very possible from these lofty levels without a big catalyst. I could see us trading S&P 1900 with the economy maintaining current levels.
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