The S&P has topped !
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Yes.
1) Rate hike (fear of) - More hawkish members on FOMC this year
2) Muni bond market collapse because a) investors will be getting margin reqs when they really tank and b) states cannot print their way out of deficits and must cut spending - negative pressure on the economy as a whole
3) European debt crisis is not solved.
4) Sentiment is too high, CBOE put/call volume closed at a lowest point since somewhere in 2007, moving average is also quite low though not yet at "this is insane"-levels, vix closed as low as 2007
5) There is no recovery - the only reason that "retail investors haven't bought the market (and that's why it won't go down yet)" is because they have a lot of debt still and are still worried of the market collapse. Without a sustainable (real) economic recovery or a full deleveraging they won't get on board this train.
6) I'm sure I forgot something.
joker: the single one and only reason everybody claims this market is going up is because of inflationary pressures created by the FED...but even if that is the case the market has gone up far too much as it usually does.
Lot of good posts in this thread.....
Seems like everyone is wrong... Shorts losing money on the back of stimulus... Some longs arguing this is just a healthy market....
This fucking market is strong, looks like we get a couple breathers here or there..... But thats about it for a while.. .. And i was short at 1276 expecting a small pullback....
The real question is how does this all end.... Is Ben hoping by the end of Qe2, that the market even with its 15 % correction will be high enough to sustain any meaningful pull back, sans a major collapse which is starting to look unlikely the more me move along....
Qe3?
Out of ideas at this point....
Seems like everyone is wrong... Shorts losing money on the back of stimulus... Some longs arguing this is just a healthy market....
This fucking market is strong, looks like we get a couple breathers here or there..... But thats about it for a while.. .. And i was short at 1276 expecting a small pullback....
The real question is how does this all end.... Is Ben hoping by the end of Qe2, that the market even with its 15 % correction will be high enough to sustain any meaningful pull back, sans a major collapse which is starting to look unlikely the more me move along....
Qe3?
Out of ideas at this point....
I wonder if this is a common human trait and what causes it and how to prevent it. Some talk about "shorting the pullback" and so forth. Of course shorting pullbacks is nice if you are really good at it historically (who is?), but even if you are expecting a quick pullback why not just go long ahead of the pullback anyway?
Even if there is a pullback then you'll still come out ahead and the other scenario is that there is no pullback. Isn't shorting pullbacks sort of against your own conviction then and a bad risk:reward ratio?
Even if there is a pullback then you'll still come out ahead and the other scenario is that there is no pullback. Isn't shorting pullbacks sort of against your own conviction then and a bad risk:reward ratio?
I wonder if this is a common human trait and what causes it and how to prevent it. Some talk about "shorting the pullback" and so forth. Of course shorting pullbacks is nice if you are really good at it historically (who is?), but even if you are expecting a quick pullback why not just go long ahead of the pullback anyway?
Even if there is a pullback then you'll still come out ahead and the other scenario is that there is no pullback. Isn't shorting pullbacks sort of against your own conviction then and a bad risk:reward ratio?
I very much agree but sometimes it's had not to short if your nature is let's say, a little on the trigger happy side. So what I do is play small and only go for a small profit. This can work OK if you have a good entry.
Even if there is a pullback then you'll still come out ahead and the other scenario is that there is no pullback. Isn't shorting pullbacks sort of against your own conviction then and a bad risk:reward ratio?
I very much agree but sometimes it's had not to short if your nature is let's say, a little on the trigger happy side. So what I do is play small and only go for a small profit. This can work OK if you have a good entry.
Yup, that's what I said, but you're still better off not trading and waiting for the market to be more accomodating most likely.
Unfortunately I'm terribly biased against the current market on a fundamental level, but the technical signals are not at all there that the market is forming a top. Another worry I have is that a lot of things look EXACTLY the same as in April last year (and I find that if things look exactly the same, the outcome probably won't be because everything is in constant chaos and if everything looks the same it probably is actually very different from before). These things are:
-Large correctionless upward move, in fact it is setting historical all-time records for having no downside at all. In the graphs since 1990 I don't see anything that looks similar to this, a rally without dips and which is, on the S&P, completely linear going in a straight upward channel for four 4 months (even after the december dip it is still in exactly the same channel as before...it's uncanny imo)
-Sprint of >0.5% accompanied by very optimistic put/call ratio extreme and previous optimistic put/call trend formed a top for the euro indices last year. The only problem is a lot of euro indices don't look anything similar to the US index which is unique in its unrelenting rally
-Google Insights reports interest for "Stock Market Correction" to be forming the same pattern as before last correction (higher interest going into the rally and the first dip it takes, but being too early, lowering interest going higher approaching the top) so the completion for that "pattern" would be decline and interest picking up again.
-The US is on the agenda for a debt crisis now in the municipal and state sectors and the problems with PIIGS are not solved (Euro indices reflect this more - CAC40, EuroStoxx 50. DAX and AEX (Dutch, mah town yo) indices perform well, DAX being somewhat similar to US trend growth past months).
-VIX index/AAII index/52-week highs/lows
However I don't really know what to make of it. It would certainly be interesting if the market went down within two weeks again because that would confirm that my pattern recognition could possibly be correct (or chance). On the other hand, a "real" bubble could emerge and it could have an even bigger upward move. I'll have to wait for the technical signals because the downward bias can get expensive in a proper bull market.
Fundamentals ..........now that's an hombre I pretty much totally avoid. He is so full of manipulative crapola. I just use my own stuff. That's all I have found that I can trade...........and of course it's not easy. We are in a game here that is .........whew, difficult. After 25 years I have now lightened up my plays and risk so much ......seeking less emotional intensity,risk and pain. And you know this has really helped a lot. Things are working much better now.
I don't think you realize how incredibly strong your permabear bias is right now. The steady upmove right now is quite normal and there have been many much larger moves over the last 20 years. Corporate earnings are massive, take a look at the good ones and think objectively about the amounts ( in the billions ).
I do wonder sometimes, what people are thinking about on this site. The earnings numbers are staggering, the money has to go somewhere, it seems logical to see more m&a and dividends ( has been for 5 months ). And voila, this is actually occurring and still people babbling on here about stuff that hardly matters until spring 2012 if not later.
I'm sorry, but when I'm trading growing companies with P/Es between 8 and 14 I'm not to worried about "bubbles". I guess you are waiting for P/Es of 5-10 to get interested are you ? Funny thing is, I saw a guy talking about RIM when it was P/E of 7 and he said at that price it is almost priced to go out of business within a couple of years. Think about that for a second. Lot of permabear analysts driving down RIM and they made record earnings.