What Now?

S

stonedinvestor

I don't know what to believe. The Hindenberg Omen vs the rare buy signals recently, the growth rate of the economy vs the risk in the borrowing market. The fair earnings and individual stock blow ups, the narrowing of the advance vs a bounce back in oversold areas and solid biotech....

Everyone is saying big cap, export heavy the global play. It's ok the US can fall apart, our banks can tumble, oil can soar and it's ok more companies are exporting. To a certain extent it's true- in the GDP every % taken out by our weakness was replaced exactly by exports. To such a degree it looked fishy. This notion that when the US catches a cold no one else gets sick anymore, maybe I'm the last one... I'm just not buying it. Europe is now slowing. Asia ought to a t least get a runny nose out of our mess.

We remain in our downtrend market with the hope of finding a bottom at last weeks lows and then a couple of weeks of sideways action with a big lift in early Dec when Xmas starts to look a bit merrier... that's how I see it now. However it would not take much of a push to replace last weeks lows with August lows that's what's scary, we will still have our Bull market but oh that will hurt ~ stoney
 
Sit tight? >>>Baby I'm trading!

BOUGHT DGIT! That's right folks back in my relative strength monster had to.

BOUGHT SSRX Chinese Bio cause' I'm nutso... Well. there's more to the investment than that....

SOLD CHICAGO BRIDGE & IRON> Big Gain there.

Through the jiggling and wiggling we are now DOWN to 5.5% CASH and that will be deployed this month gradually as opportunities arise.

We shall have a very nice turn in early Dec... the Cycles tell us that... we just got to get there without crashing.

Today is a good day. I've been waiting for this. These SIV's are turning up for sale so some are being priced and that effects other players who then have to mark down their holdings again, it's an endless cycle for them... just take it all Fellas! Tell us it's a 100% loss we don't care. Get back to business, move on silly boys cause' we are not doing an S&L bailout on your ass- your stocks can go to zero.

People have MISREAD the Fed today which is perfecter for us stonedinvestors... now the often overused "Punch Bowl" phrase is being used as in Ben Took The Punch Bowl Away. The Fed will be back in cutting in December. LIBOR must come down. That's a surprise ignition for A December Rally, I hope...

Until then- Billions and billion of more write downs coming, but already we are numb. More from here? Everybody who wants to as of today is already out of these stocks, so they are bound to start rallying any day. Now it will be the " spread " to other industries if it happens that roils the market... today my sources tell me the Fed injects $41 bln in repos; largest since credit crisis began! None of this is good news but the news is out. Very often it takes a few weird back and forth days to figure out a market direction after a fed meeting... but what's different this time and what really no one is looking at is past easings have taken place coincidentally and sometimes because stocks were very much off their highs. This one is different, it's a shock to the system ease- a freeze in our loaning system- it's more scary for that reason and also now we can't rely on the usual return metrics quoted to us after a second ease etc. It's different this time-- we are lowering rates within grasp of a high. So after we flip and flop which way do we point?

The heard is always wrong and the heard says boo hoo bad Christmas... it might be time to take the other end of that bet!

The jobs number Friday-- last time a crappy number was a good thing, now they tell me it isn't... but let's imagine for arguments sake that it's over 100,000 tomorrow...
~stoney
 
I've thought for a while that we are in one big trading range. The reason is that everyone is either a convinced bull or a convinced bear. No one expects a range, even now after plenty of signs. Maximum losses & frustration will come from suckering in both for the next few months. We will IMO continue to range from the highs to the August lows (and probably take them out by a little for a day or two, before reversing).

Look at the market action - it is symptomatic of a trading range, not a clear trend up or down. Lots of chop, people getting bullish at tops and the market instantly reversing on a dime, bearish at lows and the same happening. Look how quick people went from bears at 1490 to bulls at 1550, all within the space of 9 trading days.

I was mildly bullish at 1490, and then said sell & buy puts at 1530ish. I was a little off on the latter but they have proved good buys now. Buy dips when there's fear and extension to the downside; buy puts when there is greed, everyone gets bullish, and the market spikes to overbought.

Then finally, when the market breaks 1370, look for VIX at 35+, exit your puts, wait for the front page "panic" headlines, then hold onto your nuts and go maximum long. Do not sell till we get back to 1575.
 
Alright the buy today is NIHD. Saw it was up yesterday in the big free fall bottom in? I think so. Good company.

Does anyone else get pissed when they go on Street.Com and the headline blares "Futures Swooning"
or " Futures Pointing To Down Opening " When any amateur reader of the futures and the market know's better? I often try and help the fine fellow at The Street by rewriting his lines... today for example I suggested that although the futures were pointing lower we would likely rally off the jobs report... the thanks I got?


Stoney, my editor and I will not be changing the approach we have to
writing the market article. Everything we post is correct at the time we
post it. I'm sorry if you feel differently, but we're just reporting on
things as they are actually happening.

Your feedback is appreciated in all other respects, but in regards to
the headlines, I'd thank you for no more criticism.

Robert Holmes
Staff Reporter
Robert.Holmes@thestreet.com
TheStreet.com

It's not easy being the stonedinvestor!
 
Well I'm home now and the market is down. I expected this in a way (I actually thought we would go up a hundred or so and then give it all back distressing people and then roar ahead into the close) Anyway it's the roar into the close- will it happen? Absolutely. Every monied professional I have spoken to has said no way who wants to hold over the weekend? That's why I think it may happen. Classic bear trap in a way....

Will all the indices have to scrape their Oct lows? It's possible but I think now we have the decoupling I have been waiting for. The financial picture is bad and getting worse and that's their problem. I've studied all the angles on this and I think enough is known now, that the spread into the real economy is limited to the loss of wealth of those owning shares of Bear, Merryl, City, etc going down. Investors in those stocks are rich anyways life goes on.

The news today on the job front was in a way great news because the inflation aspect ticked down- wages paid-- that's because we continue to add service and lose manufacturing jobs , those manufacturing jobs come with the larger paychecks.
Job strength here is as good a peg as any for us to hold our hat on. And if I can just allow myself to believe that the rest of the world can continue without the dear old US up to form -and I'm having a whole hell of a lot of trouble on this one point.. but if I can believe that-- I can invest here a bit.

I continue to change my style now. No longer hunting breakouts and strong small cap stocks I continue to look for good big stocks with sex appeal. Today's purchase of NIHD I think fits that bill. I'll do a thread under stocks on this name at some point. But just in the most general sense. Yesterday when the gates of hell had been thrown wide open I glanced at the ticker at NIHD was flat. This after days of declines. Well if it didn't go lower yesterday? When will it? Think about it.

The NDX hasn't really gone down very much although we have been internally correcting for weeks. Anybody notice that? On a three day basis the NDX is down 0.3% vs. a 2.15% decline for the Dow and S&P 500.

Now this is where Cycle work drives me crazy-
There is a " momentum " peak coming up on the 5th. And a " trough " on the 9th..... I don't really understand that I've been focusing on the BIG picture which called the sell off perfectly Oct 15-18 and calls for a turn DECEMBER FIFTH! These peaks and troughs are mini inflection points along the way - what gets tricky is figuring out where we going up before the turn day so the turn is down? Or are we in a downtrend and the turn is up? It's possible the Fed meeting has distorted all of this and makes these Cycle predictions moot but the FIFTH & the EIGHTH of this month are the key days. Just recently we were going up with bad volume and breadth so it seemed obvious the turn down would come on Oct 4th or 5th... But now we have a decidedly different picture and my read on Cycle theory is you still call for the flip no matter the direction so what was supposed to be a high is now a LOW. We must call for a ST rally then around the FIFTH! Does that mean it ends three days later on the 8th? I don't know. Does any of this make any sense? This is what happens when I try to explain these things myself instead of cut and pasting! Anyway- I just keep focused on the ebbs and flows of this month with the aim to be fully invested by December 5th . The important long term cycle turn date that counts. ~ stoney
 
2:18 and it's all on the table. Sitting on support and it could go either way. We could break to terrible new lows and prove every banker, economic guru, market technician and stock tipster right..... Or we could SQUEEZE SOME BEAR JUICE in a perfect trap!

Very important next move for Mr. Market. ~ stoney
 
Quote from stonedinvestor:

2:18 and it's all on the table. Sitting on support and it could go either way. We could break to terrible new lows and prove every banker, economic guru, market technician and stock tipster right..... Or we could SQUEEZE SOME BEAR JUICE in a perfect trap!

Very important next move for Mr. Market. ~ stoney
More...

So what you're saying is that the market could go either up or down? Thanks for the tip.
 
No what I'm saying is...
Well I'm home now and the market is down. I expected this in a way (I actually thought we would go up a hundred or so and then give it all back distressing people and then roar ahead into the close) Anyway it's the roar into the close- will it happen? Absolutely.

Stoney may not always be right but he's always straight. I've been deploying cash if you've been following my posts so obviously I believe we are going up. ~ SI
 
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