Why We Think The Market Should Go Down Next Week

Quote from rock34748:

Israel nukes Iran causing WW3. Again who knows.

I'm a noob, so don't listen to me, please. :p :cool:
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Israel will only use nukes if Iran has nukes. Israel does not need to use them in this case, and, as someone who's stated and analyzed this scenario, it is likely, though would not trigger WWIII. You'll find Mutually Assured Destruction will keep superpowers at bay from themselves and not squabble in this geopolitical game of brinkmanship.
 
Quote from NoBailOutBoy:

Come on guys, anything more than charts.

Maybe some logic, rationale or otherwise?
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Median price to book, but if you study options theory, you'll find variables like risk free rates, volatility, and other components predict financial prices quite well. They just don't tell you which way they're going to move next, just how big and likely the next move is, and how much potential profit there is in such a move. Options mispricings is how I've made most of the dough I have.
 
Quote from tradersboredom:


forex, options and futures and b.s. derivative markets are a joke or close to scam markets.
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I wish everyone on ET understood this. You are absolutely right. Those markets are for instiutions to hedge MUCH LARGER portfolios than most people on this site trade with. That brings up another point about being mindful of who is in charge of your market, you, or the market maker you just bought from? Not that those markets aren't super efficient, it's just that there's too much leverage, and it doesn't take much to scare you out of your position, whether you're right or not in the long run. The adage "The market can stay irrational longer than you can stay solvent" only applies with superleveraged instruments. Assuming you are right, eventually, as the quote implies, if you knew your risk, you could be profitable even if it took a long time to be proven right, and essentially this is what Soros and every bear fund has done since 2005. They managed to keep their risk reasonable up until the point they were proven right, despite poorly underperforming the market for the five years prior.

It just makes me sick beyond belief that this site advertises a company so stupid as to offer 400:1 leverage or even 100:1. I guarantee total account losses at these levels of leverage.
 
Wait for the Bull trap to set up.

The Nasdaq is already setting it up as it trades at multi-month high, and the high for the year. The NDX is even stronger YTD and at the high for 2009. The Dow is lagging as it should be (with all the crap that makes that index) and will need to go over 9000 to catch up to Nasdaq (only hope is a big % move in IBM). S&P is where the battle is. Will it be pulled up by the Nasdaq or down by the Dow??? This is definitely not a place I will put my money in yet. I would like a reversal after a bull trap setup, so a breakout over the resistance for the S&P and let her go to 900. Let the buying frenzy and short covering die, and then it will be time to sell short. I think there is a 60% chance that a stop over 875 will trigger if you are short right now. Just my $0.02 worth(less). I expect the VIX will go lower before this rally dies. There is great leadership in tech.

Disclosure of Open Positions:

Trading accounts: Flat

IRA: I am long SSO in my retirement account. I had the $24 calls written on it which expired worthless today. My average cost including the premiums I have collected so far is $19.88. I'm not sure which one to write for next month as I think it will be another year of sell in May and go away... But I can also see the SSO topping at 26.50-28 in May. The options expire early, May 15th, so I may take another stab at writing the 24 or 25 and hang on for dear life over the next four weeks, lol.

Interestingly enough the SSO closed at 23.56, yet the 23 puts for May are trading 1.40 X 1.45 while the 24 calls for May are trading at 1.25 x 1.30. There must be a management fee due or something like that, lol. OK, maybe it's just that the bears are willing to pay more for the puts...
 
Quote from Brandonf:

Welcome back Tony! Good to see you back on ET.
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I got a weekend pass from Jodi, it won't last long (just like she took my facebook account away and made it her own, well a faqmily page), but while I am here, I am going to make the most of it while I can. Let's see if I can increase my average 0.13 post per day up a little bit. How have you been, btw?
 
There are many reasons the market will most likely dump in the next week.

1. Declining volume on up move as mentioned.
2. Capital Markets Liquidity Index drying up on up move.
3. Martin Armstrong revised cycle date 4/23.
4. If nothing else this low needs a re-test.
 
Quote from rickf:

I agree 100pct we are due for a pullback, perhaps as early as next week. After the 30% rise in the past month, I daresaay it's a matter of time before profit-taking kicks in.

Technically it looks like primed for a pullback and retest of the lows on the weekly SPX chart. But what do I know? :)
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The market always moves in the direction that hurts the most people.

B
 
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