We have a possible set up for a tradable top that triggered today. This is the fifth potential topping set up we have seen this year. Prior to this year we were in a full fledged bull market and these set ups were not present. Do I trust it? Not sure yet. I wanted to make you aware primarily because this market is so dangerous right now. Our Central Banking Masters have really gummed up the works and the margin call that occurred in the oil complex may be coming to the the rest of the market soon. Each time we have had a set up occur, it has been wiped out but it did result in a minor correction with the Sept/Oct swoon being the most recent one. This market has been trying to set up all year for the top. The Fly mentioned that we have been in a stealth bear market. He is correct! The one thing that you need to understand is that each set up that is wiped out by the CB’s sets up faster and faster each time and requires more Herculean efforts and monetary candy from the CB’s.
At some point the market will one day ignore the monetary stimulus and then fear will set in and we will be witness to an epic margin call. I am not going to add shorts until we are off a bit from the highs. We should be a nearing a short term top that may develop into something more meaningful. Stay Tuned.
If you enjoy the content at iBankCoin, please follow us on Twitter
love the road runner! how fitting 😛
Agreed. Just a matter of when not if. Our model shows SP stretched for some time now, but on balance we remained invested for the year. Gut tells me maybe try to finish the year off somewhat stable, then the kick to the head.
‘how fitting’. indeed.
Just when I think I’m out they bring
me back. +1% today
Sold everything this morning. It’s been 3 years of fun. Time to find something else to occupy my time before I blow myself up!
Draghi today will give the market its bone. This is a good read though that fits in with what you are saying BlueStar.
http://gavekal.blogspot.com/2014/12/a-dramatic-change-in-liquidity.html?spref=tw
Look at indices priced in all currencies. New highs in every currency. That is the Armstrong definition of a bull market.
The russel is lagging and is not at new highs in every currency but nasdaq, dow, S&P is.
However, I agree there are major divergences that are growing and that happened all throughout 1999 and 2000. In 1927 plenty of non US markets topped and in 1987 even though a concentration into the yen and the Nikkei took place there was still a very serious crash in the US share market. So even if domestically there remains strength there will be opportunities in emerging and frontier markets and other foreign non US markets to short.
So basically, I wouldn’t be calling a market top yet, but I can still respect selective bearishness even in the face of the potential for a parabolic move.
This action today is pretty weak. Nasdaq looks terrible. Almost all of my action is short nasdaq stocks. The Russell trade back to 1180 so it could be knocked down again. Volatility is creeping up here if you look under the surface.
Blue,
Are you moving your dec 19 puts to jan or feb.
Bill
BlueStar- Always enjoy your insight and completely agree with your analysis. Nasdaq looks ready to give it up. Watching HYG and IWM to confirm. Have some SQQQ calls already and looking to add TZA calls on confirmation.
lol,
If we are in 1927 and I get confirmation. I will go long.
bill,
already moved.
End of day death drop in Naz in 3, 2, 1… Seriously though I think a steep selloff begins in earnest tomorrow. Naz put in an almost day long bear flag today. RUT is of course at an area of great supply. Market has gone up almost unabated for 6 weeks. It’s time.
Blue,
Did you move it to Jan or FEb. I have some IWM dec 112/105 spread.
Why short IWM when you can short AMZN or the like for greater returns? Stock is in outer space…still.
Quality Control…that’s what I’ve been trying to say this whole time.
Blue, if you see this, I think your posts on AMZN are great, and has been a good call so far. But you know what I think of general equity market calls.
Forget alpha,
I am short AMZN. Normally I would agree with you about market calls but we are living in historic interventionist times. This will be epic. Then the next great bull can begin after most of you are wiped out. ;).
bill,
feb
BlueStar, does today invalidate your tradeable top set up. IS the set up proprietary? I am sure everyone saw this but may as well put it out there anyway…S&P 500 ties 1929 with 48 record closing highs
Not yet,
But as I said in my post I don’t trust it yet. ECB could give us lift off. I will wait to shoot it in the back.
Even though I’m sure the bears are jumping up and down that Draghi didn’t announce QE infinity…I think it’s hilarious that he said the ECB is considering purchasing all assets EXCEPT gold. LOL
Forgetalpha,
I am bearish on Gold.
Had 20% cash -now 5%
bought $C around 55. Still think
American job growth is key and it’s still
growing. We’ll see.
Blue I knew you were bearish on gold I just thought that specification from Drag was hilarious.
Blue,
Do you still like TLT here? I was thinking about starting a new position. Thanks for any input.
I’m not a finance person, just expressing a layman viewpoint-
BlueStar- I get and respect your technical and balance sheet analysis.
On the sentiment side though, people with your experience and competence, and old people like me, can understand that things blow up, and seemingly unimaginable market changes can occur.
Others (such as the young) have only lived in today, and only historically understand the past, if at all.
Strangely, old guys like me may be living in the future, and that is why we are cautious. I know pretty much how my personal movie will end, and that could be extended to a market view by experienced market participants.
Some are going to plow ahead regardless of what the senior traders and elders have to say.
Unless someone has an experience base or is quite open minded, they live for today. As the real estate people ALWAYS say… “it’s a great time to buy!” LOL
Whats the deal blue? Market only goes up every single day. I can’t afford to be bearish much longer..
Blue Star, thoughts on oil and where it will bottom?
Billie,
love it. Its pulling back a bit. I would wait until it puts in a trading cycle low which should be soon.
Greg,
Us old timers are always laughed at towards the top. People forget price and time. They also forget basic math a 50% drawdown requires one to go back up 100%.
Best
mtpennybags,
We should be close. Keep your stock losses tight and stay mostly in cash. Once we start rolling you can commit more capital.
Oil should be bottoming soon. Any rally will only be a countertrend rally that should eventually lead to lower lows. However if we break the 61.8% fib number of $64.38 with conviction we are headed to $50.00.