One Year To Nowhere

[X Factor 1,112]

Did you close it?

Close it at 1.90 when Spx broke 1850 this morning so a decent profit on the condors. My target was 1.15 and it came to about 1.20 yesterday. Edited January 20, 2016 by X Factor

[Expat1 971]

Definitely saw some buyers come in today...was that your doing? LOL

Nope.

Market's nowhere near where I'm going to start feeding in. Cap:GDP is still over 100

Chevron gets to 72 though and I'm buying it right back. 72 is very close to book value of the assets only.

Edited January 21, 2016 by Expat1

[OriZ 3,157]

Nope.

Market's nowhere near where I'm going to start feeding in. Cap:GDP is still over 100

Chevron gets to 72 though and I'm buying it right back. 72 is very close to book value of the assets only.

Basically tested the Oct 2014 lows and bounced from there. Normally bottoms like that get a double test, so wouldn't be surprised to see those levels again today and then it's make or break time - either we get the same reversal we did yesterday or we go explore slightly lower prices first.

[Expat1 971]

Basically tested the Oct 2014 lows and bounced from there. Normally bottoms like that get a double test, so wouldn't be surprised to see those levels again today and then it's make or break time - either we get the same reversal we did yesterday or we go explore slightly lower prices first.

Nah this little "rally" bounce is being sold into as we speak. No measurable support, yet.

[X Factor 1,112]

http://stockcharts.com/members/analysis/20160120-1.html

The monthly bars show the Reuters/Jefferies CRB Index of 19 commodities (plotted through yesterday) having fallen below its early 2000 lows to levels not seen since the the early 1970s. That's a deflationary chart. Commodity deflation isn't good for stocks. Historically, the only two assets that do better in a deflationary environment are Treasury bonds and gold.

[OriZ 3,157]

http://stockcharts.com/members/analysis/20160120-1.html

The monthly bars show the Reuters/Jefferies CRB Index of 19 commodities (plotted through yesterday) having fallen below its early 2000 lows to levels not seen since the the early 1970s. That's a deflationary chart. Commodity deflation isn't good for stocks. Historically, the only two assets that do better in a deflationary environment are Treasury bonds and gold.

Yup, and that's not surprising. I called deflation several years ago in this very forum.

All the printing in the world didn't help that. The FED is useless.

[X Factor 1,112]

Nah this little "rally" bounce is being sold into as we speak. No measurable support, yet.

Very True.

http://stockcharts.com/members/analysis/20160120-1.html

THE VIX HAS MORE TO GO... One of the things we watch for to identify market bottoms is a spike in the Volatility (VIX) Index. So far, we haven't seen one. The daily bars show that the VIX struggling to get above the 30 level. By recent comparison, the VIX spiked above 50 intra-day during the August market drop before closing just above 40. That level, in the past, has signalled some type of market bottom (or at least a rally attempt). That suggests that the VIX has further to rise before peaking. The chart below shows why moves above the 40 level are so important. Closes above 40 identified market bottoms in 2001, 2002, 2010, and 2011. The spike to 80 during the 2008 crisis is probably an outlier. Chart 10 suggests that the VIX needs to clear 40 to even hint at a market bottom. Its current reading below 30 suggests that stocks have further to fall.

Yup, and that's not surprising. I called deflation several years ago in this very forum.

All the printing in the world didn't help that. The FED is useless.

Great call

Edited January 21, 2016 by X Factor

[OriZ 3,157]

Nah this little "rally" bounce is being sold into as we speak. No measurable support, yet.

They hit the resistance points that I wanted to mention but didn't get to talk about today yet lol...S&P needs to close the week above 1890, Dow above 16,000 - or they will see 1600s and 14000 respectively this quarter. They hit those today and turned down. This is what I am watching now. I am actually hoping for a bigger rally because per my plan that I had prepared ahead of time - as you know I've been short since mid last year, but just like our conversation a while ago about adding more later(and the difference between that and dollar cost avging) I wanted to see a confirmation of the bear market before I add to my short. We got this recently by breaking oct 2014 lows(at least on an intraday basis) as well as aug 2015 lows as well as some other indicators I watch. Now it's a bear, no doubt. Now I use every rally to add to shorts. Right now planning 4 times(if they are reached) - 1935, 1965, 1995 and 2025. We'll see if they give me all, some or none

Very True.

http://stockcharts.com/members/analysis/20160120-1.html

THE VIX HAS MORE TO GO... One of the things we watch for to identify market bottoms is a spike in the Volatility (VIX) Index. So far, we haven't seen one. The daily bars show that the VIX struggling to get above the 30 level. By recent comparison, the VIX spiked above 50 intra-day during the August market drop before closing just above 40. That level, in the past, has signalled some type of market bottom (or at least a rally attempt). That suggests that the VIX has further to rise before peaking. The chart below shows why moves above the 40 level are so important. Closes above 40 identified market bottoms in 2001, 2002, 2010, and 2011. The spike to 80 during the 2008 crisis is probably an outlier. Chart 10 suggests that the VIX needs to clear 40 to even hint at a market bottom. Its current reading below 30 suggests that stocks have further to fall.

Great call

True most times, but, as I pointed out yesterday, sometimes the VIX can actually give you a non-confirmation of what the market is doing. In fact, the fact it kept sleeping this week despite the declines is what I believe gave us today's rally. When the market breaks support after support and the VIX barely budges that doesn't tend to be good for shorts just as when the market keeps pushing higher but the VIX is rising too that's bad for the longs. As an example - right before Lehman's collapse in 2008 there was a week where the market closed higher but the VIX did too and that was a dead giveaway that something is brewing underneath the surface and the people who should know it do. Our only way to know it is to watch things like that. Even in your chart take a look for instance at the 2009 bottom(Vix made lower high than the one in 2008 - non confirmation), another example is the middle of 08 compared to the begining of it(both bottoms) or even last Sep's bottom compared to Aug's bottom. So, jury's out right now on if the recent behavior of the vix means there's more to come or means there's a big rally first.

[OriZ 3,157]

I guess Soros sees things the same way I do:

Soros said while China has resources to manage the situation, the slowdown there has spillover effects on the rest of the world. The investor said he shorted the Standard & Poor’s 500 Index, which is down about 8.5 percent for the year, and advised that it’s still too early to buy equities,

Soros said he would be surprised if the Fed raised interest rates again after increasing them in December for the first time in almost a decade. He said the central bank could even decide to cut borrowing costs again, but it would not help much in stimulating the economy because the effect of monetary stimulus is diminishing.

http://www.bloomberg.com/news/articles/2016-01-21/george-soros-says-he-expects-hard-landing-for-chinese-economy

[OriZ 3,157]

Got the weekly save.

[X Factor 1,112]

Got the weekly save.

Yep

[OriZ 3,157]

Nope.

Market's nowhere near where I'm going to start feeding in. Cap:GDP is still over 100

Chevron gets to 72 though and I'm buying it right back. 72 is very close to book value of the assets only.

Valuations right now even after recent declines are only slightly lower than they were at the 2007 peak, and higher still than at any other tops in history except for the 2000 and 2007 tops. While currently 12 year prospective S&P500 annual total return has now moved from zero to 2.5%, I would still wait till it's around 8% to start buying.

Even during major bear markets, normally around 2% of stocks still significantly outperform the broad market, that's true - so it is possible to find one of those stocks - but it's like finding a needle in a haystack.

Edited January 25, 2016 by OriZ

[Expat1 971]

Valuations right now even after recent declines are only slightly lower than they were at the 2007 peak, and higher still than at any other tops in history except for the 2000 and 2007 tops. While currently 12 year prospective S&P500 annual total return has now moved from zero to 2.5%, I would still wait till it's around 8% to start buying.

Even during major bear markets, normally around 2% of stocks still significantly outperform the broad market, that's true - so it is possible to find one of those stocks - but it's like finding a needle in a haystack.

This is just a dead cat being kicked around. I'm just idly watching, dollar cost averaging at 2%, and waiting for the panic selling, which we havent seen. Still holding to Q1 earnings season and just BSing until the carnage hits. Kind of inevitable at this point.

Prolly go see my gold guy this weekend. Nothing much else to buy right now.

[OriZ 3,157]

Yeah, but it's a dead cat that could be kicked up to 1940 or even higher. Which would be great to add to shorts in(as I've mentioned first portion goes in 1935).

I think 8% annual avg return would probably come somewhere around 1,200 on the S&P500. That by no means would be the final bottom imho, but it would be a point to start buying. We could possibly see further declines from that level on a magnitude of anywhere from an additional 10% to as high as 50% although the latter is not very probable, yet cannot be excluded at this point. At the end of the day - it is technicals and internals that will determine in real time if we saw a bottom or not.

[Expat1 971]

Yeah, but it's a dead cat that could be kicked up to 1940 or even higher. Which would be great to add to shorts in(as I've mentioned first portion goes in 1935).

I think 8% annual avg return would probably come somewhere around 1,200 on the S&P500. That by no means would be the final bottom imho, but it would be a point to start buying. We could possibly see further declines from that level on a magnitude of anywhere from an additional 10% to as high as 50% although the latter is not very probable, yet cannot be excluded at this point. At the end of the day - it is technicals and internals that will determine in real time if we saw a bottom or not.

Bottom? Take a look at M2 velocity and tell me where you think the market and economy are heading.