Per my post on Monday I think we saw the beginning of the counter trend rally starting today or perhaps tomorrow. I am expecting a rally of 5-10 trading days. If we peak out within that time frame we will likely go much lower . If we go to a new high I will need to reassess my bearish ways. However I don’t think that will be the case. Only time will tell.
Tactically I covered my IWM puts initiated at the beginning of the month into the close for the win and will look to put back on in a week or two. I am all cash except for my small LVS short. I am now nicely in the green for the year. QE ends in 4 weeks. The dollar and commodities are foretelling the commencement of a great deflation upon the world but things don’t go down or up in a straight line. The rubber band has been stretched too far too quickly. Look for a bounce in commodities and stocks and a reversal in the dollar. However, beware that a new regime is emerging. King Dollar is back and what has worked for the last 5 years will not work going forward.
Side note: Working on a long idea. It will be a trade not an investment. In the beginning of bear markets there are no investments.
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Your posts have such clarity.You remind
me of things I think I know but,
that bull market has given me
more confidence than i’m entitled to.
so thanks
oh, I wanted to hold AAPL, guess not.
Well played.
Bluestar,
How do you avoid a total waterfall decline from here in case it triggers. You will be out of market or placed in long trade.
thanks for your post Bill
from gorby,
Thanks.
flyaway18,
read my piece on AAPL. Its over, done, finished. In my piece i talked about margins peaking. Now we have proof. the phone bends. why? because they skimped on the endo skeleton. they are trying to preserve margins. Go to where the puck will be not where it has been. Oh yeah, I know people who manage billions that are fading this name. just trying to help you.
QA,
Thanks,
I hope you crush it on the way up.
A snapback rally for a few days would be fine with me, then the roll over followed by the big flush
Bill,
I don’t believe it will waterfall from here. the IWM has gone from 116 to 107 in 19 trading days. Thats a 7.7 percent move. Plus we are moving into the trading cycle low time frame. All great crashes need the set up. Look at 1929. we peaked on 9/3 then we went down 15% into the trading cycle low on 10/4 rallied 5 days up 11% and then it was over. I am not going long a stock.
Bill,
I will get short again. My put prices will be cheaper.
Blue,
I will like to get your take on solar cycles.net ..john hampson he say 20 percent decline in 2 to 8 weeks. Won’t let you get in and out. Appreciate your replies. Bill
Blue, do you still like TWTR? What do you think of FB? Thanks.
Blue, Do you really think we are into bear market?? What about a overdue correction of 15-20% then a resume of bull ?
If its Bear then you are seeing downside of more than 20% right? What would be your target?
Blue, Draghi gave us nothing. No catalyst left for a rally (even though the Futures in Europe Session is up big). NFP will be revisited but everyone knows that and it is baked in. If not revisited it will get ugly. Junk is pointing us Down in the near term IMHO.
Trading_Nymbph you have been saying the exact same thing for the last year, how’s that working out for you?
Bill i am not familiar with that work.
john Hager,
Like twtr long term. pass on FB.
Piotri,
resumption of bull. perhaps. lets see once we get down there.
Playing the bounce with Oct calls bought yesterday. Some of the paper is Oct. 10 weeklies, so I’m aligned with your thinking of no more than a 10 day rally.
fryguy,
We shall see. If the ground is shifting under our feet we shall learn very soon. Good luck with your calls.
If market can go up while dollar explodes, doesn’t that suggest improving economy? this is unlike what we’ve seen. I anticipated a dollar pullback would allow equities to breath, but now we are seeing them move concurrently and perhaps the deflation thesis needs to be reconsidered (for the time being)
mhass33,
Don’t read to much into one day. If I am wrong it will be because the rest of the world is so bad that capital comes here for a final blow off top. The economy blows. The job number are nonsense. the participation rate is a joke. Enjoy the counter trend rally and lets reassess in 5-10 days. The dollar is about to reverse. Trust me. It will be brief.
Blue,
we’re the best house on the worst street. I think your capital flows will conitnue at a record pace for the blow off.
Love your posts plain, no BS.
thanks
The indexes have quite a few open gaps above here (even up to SPY 200 range).. A rally to fill some of those gaps seems likely… The IWM looks fulgy.
Have a good weekend..
I’m already out of 75% of the options I bought yesterday. Easy money has been made.
Thanks Bluestar. Always enjoy reading your blog. Have a nice weekend
Abandoned any hopes of 2070 and now see a ST top in already (1973 +/-7) or soon at 1985 (+/-7).
Added UVXY and SPXS calls late Friday in anticipation of new lows coming.