The Coming Bear Trap

[lauriston]

Interesting to be discussing a bull trap, just today I decided to take a different angle of the "Fed" trap. I think we are in for a very rocky April with crude oil, housing, earnings etc. Here was my take today:

http://tinyurl.com/2mg2dd

If the yen carry trades are taken off again, it could get really ugly!!

 

[calibertrader]

Quote from lauriston:

Interesting to be discussing a bull trap, just today I decided to take a different angle of the "Fed" trap. I think we are in for a very rocky April with crude oil, housing, earnings etc. Here was my take today:

http://tinyurl.com/2mg2dd

If the yen carry trades are taken off again, it could get really ugly!!

That's a great post, LOL.

 

[murray t turtle]

Quote from calibertrader:



The only problem, most are kind of sloppy, but if you take out that one week disaster, the bases start to look much nicer.

Again, I have to reiterate my skepticism, but at this point I have dipped back into the long side today, and will continue to do so until signs of trouble emerge. I would have thought that by now some signs would have emerged.

But outside of this morning's sell off, on low volume, which is great, the market itself has acted quite perfectly. And the recovery off the lows today came on a pick up on volume and the many new potential leaders that are on my list really picked up steam just before the market really perked up and exploded as the NASDAQ went positive.

With a quiet period ahead, we may be in for a nice little rally over the next few weeks with some powerful moves. I don't expect much more, but considering no one else does, maybe the market surprises us.

RANDOM MUSING:

I still hold my bull trap theory. Now that we got a correction of around 8%, the good move off the lows will serve to bring in the money that was waiting for the correction.

================
Might be right on rally;
tried a small scale in longs late today, but they wouldnt fill a tight limit order, probably go down a bit more anyway.

Like good uptrends/downtrends myself;
stiill looks better on polar bear side now.

Calibertrader;
i have a .50 caliber old fashioned muzzleloader.

DIA,SPY/ES,QQQQ still below 50 day moving average;and havent been able to rise above 50dma much for many weeks.Sell volume better than buy vol,today & for many weeks.

GROW still strong/growing, not in that one now.;
most 200dma still up for long term investors.

 

[calibertrader]

CASH is King. With so many shorts setting up and the markets inability to hold the gains, it's time to run, not walk, from the long side. So I spent the morning unloading and had fun catching some unsuspecting market makes trying to hold up their stocks. It's time to begin short selling operations, but not at full steam until we get at least another tiny bounce of around 1% from the 20DMA's. Which may happen tomorrow or Monday. Interestingly enough I got the exact rally I wanted 5% and to the 50DMA's from the March 14th lows.

Good Luck

PS
Chanster, I'm back on your side, LOL.

 

[ByLoSellHi]

We'll retest and then break new highs by May.

Then we sell.


Damnit.

 

[calibertrader]

Quote from ByLoSellHi:

We'll retest and then break new highs by May.

Then we sell.


Damnit.

That's asking alot from a market with so many uncertainties.

Market's like to climb a wall of worry not uncertainty.

 

[ByLoSellHi]

Quote from calibertrader:

That's asking alot from a market with so many uncertainties.

Market's like to climb a wall of worry not uncertainty.

One man's worry is another man's uncertainty.

 

[calibertrader]

Quote from ByLoSellHi:

One man's worry is another man's uncertainty.

Very True.

 

[ByLoSellHi]

The big question for me - and I'm not a huge bull except for a few select sectors, for the time being - is where will people who fear inflation yet loathe the low yield banks and the government and even corporations will give them (on corporate bonds), put their money?

People want to do substantially better than their perceived level of inflation. They don't want to believe they're dipping into saving every time they pay an insurance bill or fill up their tank.

The real estate situation has scared everyone to death.

If valuations of U.S. equities were really high, I might have a different opinion.

Equities aren't cheap, but they're not at 2000 levels, by any stretch. And the quality of earnings is better, too.

This should form a floor for any further downside.

Maybe I'm wrong.

But where else will people put the money, other than equities?

 

[calibertrader]

Quote from ByLoSellHi:

The big question for me - and I'm not a huge bull except for a few select sectors, for the time being - is where will people who fear inflation yet loathe the low yield banks and the government and even corporations will give them (on corporate bonds), put their money?

People want to do substantially better than their perceived level of inflation. They don't want to believe they're dipping into saving every time they pay an insurance bill or fill up their tank.

The real estate situation has scared everyone to death.

If valuations of U.S. equities were really high, I might have a different opinion.

Equities aren't cheap, but they're not at 2000 levels, by any stretch. And the quality of earnings is better, too.

This should form a floor for any further downside.

Maybe I'm wrong.

But where else will people put the money, other than equities?

Markets can stay cheap for a long time, no rhyme or reason needed.

If a major problem is being foreshadowed, then the current value could indeed be expensive once the problem rears it's ugly head. (a 100 PE could be cheap if the company will earn 10.00 from 1.00 next year, new PE 10).

5% bank accounts are pretty good and beat inflation...Nice and safe for now.

Housing market, we haven't seen anything yet, especially if unemlpoyment starts to rise, then look out below.
Then they will know what scared really is.

Don't rationalize, step back and ask yourself how the market is behaving. It's easy to look for factors or reasons that agree with your view.

But this fear that's building will ultimately lead to a bottom that will lead to prosperity, always does. Just need to stay patient.

Who knows, maybe we run again now, but that's the market folks.