Is S&P forming intermediate term double top?

IS S&P forming an intermediate term double top ?

  • Yes

    Votes: 40 41.7%

  • No way

    Votes: 33 34.4%

  • I don't like you or these polls

    Votes: 23 24.0%
  • Total voters
    96
I shorted AAPL a while ago due to philosophical concerns. I am net long stocks, many of which have on a case-by-case basis outperformed AAPL. I'm mostly long single stocks in order to hedge my practice of picking tops.

Next to that I think it's not impossible we continue this uptrend for a while. Who said I am trading my idea of a big dip right now? I am just noticing a lot of bearish signals both in macro-economic data as well as in technical and volume indicators. My main point is that getting long now is extremely risky (especially with all this talk of a near risk-free environment, where did we hear that before?). The best play in this market at this time would probably be to sell (hedged) call options, were the IV not so ridiculously low.
 
Quote from Locutus:

I actually don't need to search for reasons to be bearish, I just don't mind adding some for timing purposes. After all, a bunch of people were (correctly) bearish throughout 2007, saw the crash coming yet lost a load of cash due to being too early and not persistent. Hence my questions if anyone has experience with breadth indicators. Now since you started on the fundamentals, I am happy to provide my arguments.

Have you noticed that the participation rate is going down while unemployment is going up (slightly)? Not to mention that long-term unemployment is going down. There is no doubt this indicates that people are simply giving up. Have you noticed the exponential increase in deficit spending? I wouldn't argue US federal debt is "out of control" at this time, but with rising interest rates and another year (god forbid another term) of Obamanomics and then we will see what happens to the Federal budget, which has been using essentially free money for the last year or so. I find that the unemployment is way less volatile and more trend-like than industrial production indices, which can reverse quickly.


To recap, the unemployment rate has not moved significantly from the bottom of the crisis whereas stocks have. I think expectations priced in the stock asset class are wrong, both on the inflation expectation and recovery expectation.

I'm really not such a big fan of corporate earnings because:
a) They're not inflation-adjusted (inflation-adjusted corporate earnings are not that impressive, see P/E)
b) Balance sheets don't look very attractive (Though I have been long some stocks which I liked. I'm only actually short on AAPL as a matter of principle)
c) P/E is nowhere near all-time lows and currently well above average (by over 30%). Would you say economic conditions in less than five years are going to be 30% over average?
d) deleveraging cycle for consumers is not yet near complete, consumer credit still unsustainable
e) Several critical markets are not recovering (Housing)
f) Inflation in food prices will mean, especially for the poor, less money to buy stuff (from your loved tech stocks). Considering they're already absurdly leveraged I doubt they will be really willing to take on much more debt (although consumer credit increased again, ridiculously)

Further reasons would be state-side problems, where California is actually going to use IOUs next year and New Jersey got a downgrade from one of the rating agencies. The market has conveniently ignored these issues, by way of focussing on the EU crisis which isn't nearly a problem of equal proportion.

The only real chance of a recovery is that the messed up western fiscal policy is actually going to work and for the rich and powerful (who as a group are still doing really dandy actually) to save the day by spending us out of the dip.

I don't know whether we might test the old lows, form a new bottom or just have another correction (which would confirm sideways trend, which would imo be much more suitable for current economic climate)

I also don't exclude the possibility for the stock market to keep increasing for several months, perhaps years. I just find it very unlikely.
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A few tidbits. Jobs are the very last thing to improve in a recovery.
So the main indicator now would be is unemployment getting worse ? And they aren't numbers are pretty flat.

Two, you are ignoring China/India/etc, who are on a dfferent path. The top performers on the Dow ( for example ) do tremendous business outside of the US.

Yes, poor people cannot buy stocks. Yet there were willing buyers late this year. In fact, m&a activity has picked up considerably suggesting that companies themselves are willing buyers.

For markets to go down there needs to be willing sellers who will even take a cut on their current balance selling into a drop. I don't know who these motivated sellers really are. Certainly not underperforming mutual funds. Certainly not people who own no stock. Certainly not the bearish people on here why would they own stock at 1240 when they didn't like stock at 1000.

Truth is a lot of the negativity you see beneath the surface won't become a market problem until sometime during 2012. In the meantime, we might rally to a level such that the problems only waterdown the rally we have until then. And you'll be sitting there wondering why you made no money for 2 years.
 
I voted 3! not that i really dislike those polls, but there are just no way to know.

Technical analysis creates statiqstics, not forecasts.

just my 0,02
 
Quote from Nine_Ender:

A few tidbits. Jobs are the very last thing to improve in a recovery.
So the main indicator now would be is unemployment getting worse ? And they aren't numbers are pretty flat.

Two, you are ignoring China/India/etc, who are on a dfferent path. The top performers on the Dow ( for example ) do tremendous business outside of the US.

Yes, poor people cannot buy stocks. Yet there were willing buyers late this year. In fact, m&a activity has picked up considerably suggesting that companies themselves are willing buyers.

For markets to go down there needs to be willing sellers who will even take a cut on their current balance selling into a drop. I don't know who these motivated sellers really are. Certainly not underperforming mutual funds. Certainly not people who own no stock. Certainly not the bearish people on here why would they own stock at 1240 when they didn't like stock at 1000.

Truth is a lot of the negativity you see beneath the surface won't become a market problem until sometime during 2012. In the meantime, we might rally to a level such that the problems only waterdown the rally we have until then. And you'll be sitting there wondering why you made no money for 2 years.
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The countries you mention are barely 20% of the world's GDP, if not less in real terms. Unless they grow at impossible rates it's just a ruse. The impact of demand from these countries could not be enough to provide real growth if things do not improve in the western world more quickly.

Employment is more nuanced than "the last thing to recover". The unemployment % may be flat, but participation rate isn't. Therefore joblessness as part of the total population is not at all improving. It may not even be bad for business in the near term, as it's in great numbers low-skilled workers who are out of a job. They aren't the most significant consumer group and their jobs are now free or much cheaper for the employers due to automation, no harm there. The main issue is the strain on society as a whole and the federal budget. The whole idea of companies getting "lean and mean" during the crisis (which they have) will, in this case, probably lead to a sub-par or non-existent job recovery. CA, for example, is still pretty much at historical peak unemployment.

Your argument that funds which underperformed or people who did not own stock could not sell is pure speculation. Funds have had two splendid years and may just as well fear to sit through another crash. I think nobody denies the situation is currently fragile. Even many ECB and FED members say so in-between the lines. Then again this may be bullish, as they said things were find and dandy before the crisis.

I should also add I mainly trade european indices, which have recently had a lot more downside than US indices.

http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND
 
Quote from fly down:

technical analysis works if applied correctly.
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Unfortunately, these skills have so far eluded you. You have posted numerous recommendations on here for 3 months that defy technicals in almost every case. You ignore when you are clearly wrong then post yet another series of short calls right afterward.

The one call you made correctly was a rather obvious double top retracement that many of us saw coming months before you did.
However, you posted you expected a correction at 1177 afterwards. Which suggests to me even if you had traded your "double top" idea, you'd have messed it up by now by not exiting your position. The net of holding that position is a loser today.

I look forward to your next series of top calls and the "1200 or 1400 which comes first thread". When we retrace in January you'll claim some short trade and how strong you were to call it.
 
your technical analysis suck bad

there t.a. guys calling the may,june 2009 as a head and shoulder

and than the black swan or hindenberg omen last fall.

as i know every 'strong heavy resistance' has become weak support and bear trapped.

ffact is feded injected 600 billion into the markets...that is a lot of fire power.

don't fight the fed..and don't short a dull market
in bull market you only go long or go on the sidelines if you don't want to participate in the pump and dump job. or don't want to participate in this fed fueled 'fake' rally. as we all know these pump jobs all end.

there is bad breadth in this market hence hindenberg omen...only a handful or index stocks are participating....small caps are not participating and light volume...and market is trading very thin..

this market won't stop rising until fed stops injecting Quantitiave easing or phantom money easy money or some black swan event. ibn other words the markets are being manipulated by the gov't or powers to be not true forces of suppl y and demand or earnings. or fundamentals of risk/reward.

Quote from fly down:

lol
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Quote from Locutus:

I shorted AAPL a while ago due to philosophical concerns. I am net long stocks, many of which have on a case-by-case basis outperformed AAPL. I'm mostly long single stocks in order to hedge my practice of picking tops.

Next to that I think it's not impossible we continue this uptrend for a while. Who said I am trading my idea of a big dip right now? I am just noticing a lot of bearish signals both in macro-economic data as well as in technical and volume indicators. My main point is that getting long now is extremely risky (especially with all this talk of a near risk-free environment, where did we hear that before?). The best play in this market at this time would probably be to sell (hedged) call options, were the IV not so ridiculously low.
More...

Define risky. The markets are always risky. However did you go long at 1050? If did you actually believed the market was risky at that moment? You would have missed a 200 point S&P-run. Getting long is always extremely risky, for a permabear. I have a feeling you don't realize it yet, that you shows signs of being a permabear. Even if you're not one, you are contradicting yourself. Going long is extremely risky, but you're net long. You make no sense at all. If you went long you are expecting market to rally to even more new highs, like what I predicted S&P 1270. it's like you're a shizophrenic.
 
sorry, fly down. looks like this is the end of the road for you, my friend. you cannot fight the fed and pomo. not with ta, not with anything.
 
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