One Year To Nowhere

[Expat1 971]

Part 1 - check. Been in an 1810-1950 range these past 2 weeks.

Now lets see if part 2 will happen. This will mean a decline shortly back to the 1800 area, possibly a little lower, before a real rip your face off rally to ~2,000.

Part 3 will be a drop late spring/early summer to 1700, and from there by late summer, the mid 1000s, and from there by next year could be even 3 digits. We'll see.

Russell PE: 153

CNBC was saying last night (yesterday AM for you guys) that all of the opportunities right now are in small-caps. LMAO that signals "run"

[OriZ 3,157]

Russell PE: 153

CNBC was saying last night (yesterday AM for you guys) that all of the opportunities right now are in small-caps. LMAO that signals "run"

Markets are at a very interesting juncture today with this rally. If they don't reverse very soon(possibly today), we could see 2020. And a move above 2020 could even give us a triple top(other two around the same level were May and Dec 2015).

So the next couple of days are going to be very important, right now markets are still moving in tendem with oil, which means oil is stable right now which is what I thought would happen, but if markets were to resume their decline I believe oil will as well.

[Expat1 971]

Markets are at a very interesting juncture today with this rally. If they don't reverse very soon(possibly today), we could see 2020. And a move above 2020 could even give us a triple top(other two around the same level were May and Dec 2015).

So the next couple of days are going to be very important, right now markets are still moving in tendem with oil, which means oil is stable right now which is what I thought would happen, but if markets were to resume their decline I believe oil will as well.

Have to see what the reaction to the GDP revision will be. 1% doesn't exactly send a message of confidence in a growing economy.

[OriZ 3,157]

Have to see what the reaction to the GDP revision will be. 1% doesn't exactly send a message of confidence in a growing economy.

As I have stated before I don't believe news and data causes market moves, rather vice versa. I don't watch financial news, AT ALL. I think the market is the single best leading indicator of where the economy is going - the biggest mistake most people make is trying to predict what markets will do based on economic data. It's akin to trying to figure out what the traffic in front of you is going to do by looking in the rear view mirror. It works much better if you try to predict what the economy will do based on what the market is doing - market leads, data follows. Now that's not to say there aren't any short term knee jerk reactions to data ever, but on a GDP of 0%, 1% or 2%, on any given day the market could either rally 3% or crash 3%. If it rallies on bad data well they can always say after the fact it expected even worse so it is relieved, if they crash well that's because the data is bad. It's a funny little game. How the market is going to react to GDP data? I have no clue. And it doesn't really matter. It will do what it will do either way.

Edited February 26, 2016 by OriZ

[X Factor 1,112]

OriZ like you I don't watch financial news at all. All the indications are in the market itself. I am waiting for the market to make its next move and just do intra-day trades for now.

[OriZ 3,157]

OriZ like you I don't watch financial news at all. All the indications are in the market itself. I am waiting for the market to make its next move and just do intra-day trades for now.

news is nothing but noise for traders.

[OriZ 3,157]

So I watched The Big Short last night...it's funny how people never learn from history. That same cocky attitude you received from bankers if you wanted to buy credit default swaps in 2007, the same sentiment that they are untouchable, don't bet against the banks, don't bet against the housing market, don't bet against stocks...it's all here again, yet the chickens are about to come home to roost after several years of reckless speculation. The banks themselves are still not done if you ask me, watch for bad news to come out of Deutsche to start with. Don't trust their reassurances, it is the same reassurance we got from all of them in 2008.

[OriZ 3,157]

I think there will be downward pressure on the markets until the end of May when the market has a clearer picture on who the presidential candidate will be.

I actually think the heaviest selling will come after May. That's what I'm seeing - and I don't go by the news as the market is its own boss.

In any case I think by Oct we're in the 1500's.

I try to look at those things from a purely technical perspective. The reason for that being that in my experience the market basically does what it wants, and it is only after the fact that reporters try to find an excuse for why the market was up or down on a certain day. Ever wonder why one day on certain data the market is down 2% and a different day on similar data it can be up 2%? The reports of course will try to find the "reason" for this and report on why it happened this way but it's BS. This is how this game works. The market leads, fundamentals follow. That is also why oftentimes market declines will begin long before a recession is officially declared. This is also why Lehman was actually not the cause of the 2008 decline(as it actually started almost a year prior) but rather a consequence of it.

Now that we got that out of the way, I think the reason is everyone is trusting the support at ~1820. So long as it holds we will see buyers, but once it breaks we will get a waterfall decline. That is also why I called it a trap and said I think this time they will go a little higher than 1890(see quote above from Feb 15). I do think there is a good chance though that we will revisit the recent lows and this time maybe even lower(1780 perhaps?) very soon before seeing yet another rally. That's how the market gets people - when no one will believe the decline is coming it will come. As X Factor said alot are(were) short and part of it is also short covering. Those tend to fuel and be one of the sole reasons for bear market rallies because when you sell something short eventually you have to buy it back.

Saved by the bell, again....for now.

Markets are at a very interesting juncture today with this rally. If they don't reverse very soon(possibly today), we could see 2020. And a move above 2020 could even give us a triple top(other two around the same level were May and Dec 2015).

So the next couple of days are going to be very important, right now markets are still moving in tendem with oil, which means oil is stable right now which is what I thought would happen, but if markets were to resume their decline I believe oil will as well.

OK. So it definitely looks like 2020 is on the table. The fakeout decline happened sooner than I thought(latest 1810 low) and was a trap as was called by X Factor and I. The range is still roughly 1800-2000 give or take some, and while I still believe a decline to 1850-1900 to retest as support is possible, I'm not counting on it. This rally does have more to go both in terms of price as well as time, and then as the old saying goes "sell in May and go away" this year will be more true than ever.

I still think the bulk of the decline will happen in the second half of the year. Maybe this rally tops sometime in mid april. Most violent part of the decline should be in the Aug-Oct range. I think this for several reasons - for one, this is how I'm reading the map in this particular case. But also, if you study it from a historical perspective, that tends to be the weakest time of the year even in rising markets. It just coincides nicely with how I see this year going; notice, for instance that in 2001 the S&P500 declined almost 30% in that 3 month window. In 2008 almost 40%. Then we had the decline in summer 2014 and the one last summer. So I think late summer/early fall definitely going to be a hot season.

[Expat1 971]

Not buying, not watching anymore.

Late spring

[OriZ 3,157]

So I watched The Big Short last night...it's funny how people never learn from history. That same cocky attitude you received from bankers if you wanted to buy credit default swaps in 2007, the same sentiment that they are untouchable, don't bet against the banks, don't bet against the housing market, don't bet against stocks...it's all here again, yet the chickens are about to come home to roost after several years of reckless speculation. The banks themselves are still not done if you ask me, watch for bad news to come out of Deutsche to start with. Don't trust their reassurances, it is the same reassurance we got from all of them in 2008.

Wonder if they will be in the sequel:

http://canmua.net/texas/richard-perry-on-shorting-investment-grade-513194.html

Hey, notice oil and gold? Nice little rally there.

Stocks getting closer to the end of their counter trend move I believe - thinking maybe 1750 by the end of May?

[Rob L 3,811]

Just checking in, I assumed by now you guys made bank and had cashed it in for an early retirement already. Tell me when to make the big short.

[OriZ 3,157]

Just checking in, I assumed by now you guys made bank and had cashed it in for an early retirement already. Tell me when to make the big short.

You asked for it, so don't dare tell me I brag - I'm already up 22% YTD. That's after being up 127% last year.

Edited March 8, 2016 by OriZ

[Jacque67 7,328]

Just checking in, I assumed by now you guys made bank and had cashed it in for an early retirement already. Tell me when to make the big short.

Don't spoil the bromance happening here. It's a thing of beauty.

[X Factor 1,112]

Wonder if they will be in the sequel:

http://canmua.net/texas/richard-perry-on-shorting-investment-grade-513194.html

Hey, notice oil and gold? Nice little rally there.

Stocks getting closer to the end of their counter trend move I believe - thinking maybe 1750 by the end of May?

Yep looking for market to resume downtrend soon

[OriZ 3,157]

Yep looking for market to resume downtrend soon

Went from oversold to overbought way quick huh?