These are my best reasons. I have made quite a nice career trading using simple analysis like this. In my opinion to be a successful trader, you need to be quick fingered and light on the quality analysis. But i'll add that I feel strongly that I will be proven right, and i'll gladly answer any relevant questions.
huge stock market rally is over for now!
- Thread starter B. Rowshan
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What I was referring to was the shift in the last few weeks towards excessive bullishness.
Hmmm, are such low levels of risk aversion justified given current conditions, its not like the economy has turned up and is starting to add new jobs and production yet. Unemployment at 26 year high and risk aversion back to summer of 2007 levels when risk aversion didn't exist (NINJA loans), something doesn't jive and I suspect we will find out what by the end of June.
http://bloomberg.com/apps/news?pid=20601087&sid=aVEFvOss9mCM&refer=home
http://bloomberg.com/apps/news?pid=20601087&sid=aVEFvOss9mCM&refer=home
i just look at the free stuff available on the web. recently i stumbled on the poll thestreet.com runs every week:
http://www.elitetrader.com/vb/showthread.php?s=&postid=2419982#post2419982
Looks like we do have a bullish reading going into next week. not sure if this is excessive but it is a change from the bearish polls.
Bullish 49.01% 823 votes
Bearish 37.22% 625 votes
Neutral 13.75% 231 votes
the latest poll is here:
http://www.thestreet.com/story/10498926/1/bull-or-bear-vote-in-our-poll.html
I'm actually looking at sentiment of money managers, but this poll is fairly accurate as to the current %.
Quote from Mvic:
Sox is not confirming this break out and has actually broken its UTL from March low, nor is the action in some of the high beta names. Volume is unconvincing. Too much artificial support for the market, too much issuance coming and what is hitting the market is being flogged at below market prices, rates are heading up, gas prices heading up fast hitting an already weak consumer, taxes heading up.
Most worrying is the fact that commercial defaults and BKs are at record levels and accelerating. CRE has yet to take the write downs that have hit the banks from the housing market (these are coming in 20-40% below where the banks are carrying these assets) and the jumbo write downs are really just starting on the residential side not to mention the shadow REO inventory. The unemployment rate may be declining at a slower pace due to government hiring (the least productive type and poorly paid) but it is still declining at a rapid pace (imagine how a -500K number would be reacted to in any normal year!), the ramifications on this huge and understated number of unemployed does not seem to be factored in to me. I do not see any scenario where these people get hired back in the next 12 months. Without some positive uptick in employment I have a hard time seeing any second half recovery.
Basic TA on the weekly charts all seem to indicate a correction in the next two weeks and June is the month when a great deal of damage is usually done in bear markets. Sentiment indicators are getting extreme.
Oh and sell in may and go away
Price action says buy the dips, thats all you need to know.
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