After today’s price action, we should gain some valuable insight in the coming days as to just how durable this change in character we have seen in the market of late truly is (see my video market recap from earlier for further discussion).
In the meantime, consider this an open thread for you to opine in the comments section if you think this rally has legs through Election Day, and perhaps beyond.
Also, feel free to chime in on this recent article about Goldman Sachs advising clients to sell stocks before the “fiscal cliff” hits. Another infamous terrible call by Goldman that strips “muppets” of their hard-earned capital?
I am actually really worried. The old adage “no news is good news,” may not be applicable here. The Euro’s are due to talk. That scares the shit out of me. Volume is so low right now, without bad news, that tells me everyone is just sitting there with their finger on the sell button.
Interesting take, thanks
I don’t think Obama has anywhere close to the political support from the elites that he had 4 years ago. With the appropriate catalyst in late September or October, I think big money will sell this market right into Romney’s hands.
Thanks, charlie!
I am feeling sideways/slightly down from here going into election. 132-136 on the $SPY.
…and 0bama for the win.
I’m currently looking at some charts and I saw this post come up on twitter so perfect timing. Running a SPX chart with 8,21ema as guidelines for trend seems perfectly reasonable for the 21 to catch up with price. Ideally I would love to see 1390-1400 hold and buyers step up. It’s hard for me to go against it here all the major averages are curling up and even when they curled down in the summer it was a tricky bet to say the least as you got whipped around. Today’s great caution sign to ease up, but if everyone starts shorting here could be the fuel we really need at this point way up here. With VIX so low, one could also hedge here for cheap seems like there are many options available to keep you in this market along with patience. I know some people are going to point to April but I would have to say this uptrend is lot more battle tested then the one back then which was a brief snap back into resistance. It seems like this one has been smashed with just about everything from bad earnings to countries blowing up. I dont know, that’s my thoughts at this moment reading this post few days later may seem like it was silly to not see the impending doom but technically seems good.
My business is focused on fundamentally driven long/short (event driven and old school Jones Model). For the first time in about three years we’re making good money persistently outside of our beta-adjusted net. Vol has been low in that last three years, correlation has been lower in the last three years but suddenly we’re up on down days and up more than the market on up days. I’m seriously constructive here. Whether the market is up 5 ofr10 or 15% over the next six months I have no idea but I’m becoming increasingly encouraged that idiosyncratic positions are working (long and short).
I think we will consolidate around 1395-1405, then move much higher.
For what it’s worth, The Devil is very bearish.
I am 50% cash.
The Devil knows….
“The Devil is very bearish”
—–
Well … what a coincidence !!!
And, just as AAPL teases $666 !!!
—
There’s something very Garden of Eden-esque … almost Biblical about it all !!!
.
BTW … currently …
Shorter than George Stephanopoulos !!!
.
When are you not short? You’ve been short for 2 years now… you know what they say about a broken clock being right….
… Uhhh !!!
NOT continuously … and, NOT to the same degree !
Try to pay attention !
.
Low volume AAPL blow off rally coming to an end seems likely. Sometimes divergences matter. This feels like one of those times.
Hard to know where this heads. Market will still adhere to the secular Bear trend at some point. We are not near a 1982 moment anytime soon barring a Deus ex Machina. Here’s what I see as Sept looms large.
1) increasing noise of a European solution germinating. That will be mkt positive if a serious plan gets approved and the ECB is able to monetize PIIGS debt. If they fumble this, EZ periphery spreads will blow out quickly and we know the rest. I think we get a mixed message but enough to forestall doom. (German Court ruling a wild card…Draghi etal. are waiting on this IMO).
2) To QE or not to QE. A lot of chatter as to expectations. However, Fed doing a new program here seems unlikely due to political considerations & economy muddling along with markets at/near multi-year highs.. Does a Nein to QE3 tank markets? I think not. QE3 right here would be an admission of panic or blatant political boostering, either of which could generate a negative reaction..
3) Earnings. They have weakened in last Quarter but still no sign of a cliff dive (argues against QE3).
4. Looking beyond, so-called “fiscal cliff” nonsense will dominate the conversation post election. I look for intransigence especially if BHO re-elected and GOP maintains current status (likely). They will dig in. Whether the Cliff is a real negative or not, markets will react badly to the DC show (again). So I agree with $GS here, based on past performance of Congress & Markets during the last debt ceiling hatred.
Gun to head, I think market stays neutral to constructive until after election, $SPX 1500 upside but we end year low 1300s. Likeliest threat is Europe being Europe…
Love deus ex
I think we start gyrating around wildly now in both directions. So that there will be no clues for traders as to what the overall direction of the market is.
I think we pause here, for a couple days or a week, and then go higher – Look at the channel we’ve been in . 70% cash .
Cycles would say we are there or close. We are on week 11. In 2010, the intermediate cycle peaked on week 12. So perhaps just one more little push and we roll over.
+1
Its August. Europe is on Vacation for another week or so. I no longer think that fiscal cliff’s, QE or contagion really matter but earnings are less than stellar, employment is still weak. How much more is there left in the tank? I heard Yamada interviewed the other day and her comment was that the average bull market advance is 34 months; this is running 41….but then again I don’t know if we have ever had every major government on the planet operating some sort of QE
I have two scenarios I’m vacillating between:
1) We are ramping into the election, in order to ensure Obama’s re-election. Sounds crazy, but Europe I’m sure would much rather work with Obama, and the kinder rhetoric out of the ER and in particular Germany (and their sudden willingness to at least signal willingness to consider bond buying) are all geared toward soothing the markets into the election (by the way, i don’t believe there will ever be any actual bond buying by the ECB).
2) Similar to the above, but we only bust out to minor new highs on the SPY, gain maybe another 10-20 points, and then fade dramatically and collapse in September.
Personally, I will be looking for a short play, but I do believe we see new highs first. We are too close, and the opportunity to break to new highs, have the media trumpet such, suck in retail ( in theory), is just too tempting and important to be passed up.
The $GS can kiss my ass. Brother Lloyd too.
There is a tentativeness to the market right now and I get the feeling that very few objective people view these positive gains with conviction. Just short of QE3 being announced, I’m cautious of any upward movement in the market as it just might be the rug setting up to topple longs standing on it should any headwinds from Europe or congress present themselves.
Should the “fiscal cliff” become a televised and propagated “debate” I would immediately go to 90%+ cash since economic movement is rarely positive when the actions of congress are involved.
As far as the Presidential election goes, it’s difficult to pin an unequivocal winner but I do believe the results will be close (no hanging chad). Fiscal policies notwithstanding, the GOP has taken a fairly rigid stance on social issues which may cost more independents than desired and the democrats have only started to show some teeth but it may be too little too late. However, as much as social issues may tip the scales no one can deny the exorbitant amounts of campaign funding that has come in for support of the GOP. Couple the fact that democrats are being heavily outspent and superfluous voter ID laws being passed across the nation that would prevent people from voting on a scale far greater than the supposed voter fraud it would be preventing and that’s why it will be a close race.
All very interesting talk, to be sure. But only suckers trust their money to a casino, pal.
I’m going “all in” on a sure thing: Breaking Bad-related merchandise. http://yhoo.it/O29bYs
Stocks move on emotions short term and on fundamentals long term…
Long term: What will eventually collapse this cyclical bull are serious declines in company revenues. We are in a late stage of this business cycle, but we’re not there yet. During this ‘beautiful deleveraging’ as Dalio calls it we had gov running pretty big deficits, which helped offset private sector not spending; corporate profits and revenues benefited tremendously from such huge deficits. However, goverment produced deficits have been slowly decreasing in last 12-18 months, and will continue to do so next year; unfortunately private sector is not ready to take over the baton yet… We could be 1-2 quarters away though before market starts seriously pricing this in.
Short term: Everybody expects a top so how could it be hapenning now. Also, central banks are jawboning the markets and seem to be putting a floor underneath it until the elections. I don’t believe in conspiracy theories, this is just a coincidence in policy timing here and in Europe. Nor I believe Wall Street will sell or buy this market to get either of the candidates elected.
Therefore short term, baring there is some serious damage inflicted to current technicals, this bull could run until it at least touches the previous highs (SPX). I am however ready to change my mind at a moments notice…
Couple of tidbits to ponder though (one serious and one just anecdotal, guess which is which):
– there was never any other time in history that we had a 4 year cyclical bull within a secular bear (3 years was a maximum)
– Apple touched 30 years long resistance line in April this year and that coincided with spring top. Today it touched the same resistance line again…
http://www.tradingnrg.com/weekly-forecast-financial-market-economic-calendar-august-20-242012/
December 31st, I expect $AAPL, $SPY and $IWM to be higher than today.
How much? Unsure.
Along the way I expect the PPT to flash several coy, yet discernible, oversold signals.
These signals will be profitable for all of us; As autumn is known for spike bottoms that reward the fearless.
The simple version. Up-side risk 30 downside risk 150. Any day something will scare the headless heard of bulls and they will all run for the exit at the same time. Signed Hungry Bear.
I’m pissin my pants and cowering in the corner. I agree with Rhino that the helicopter is hovering around the Sell button. Low volume August doldrums will lead to some Event driven upside, but long term elections and focus on how inept our government is will bring the market down as this election is bound to get VERY ugly IMHO. Ryan will polarize the extreme fiscal conservative Tea Party goers from the moderate middle conservatives and the democratic middle that can’t stomach themselves to vote for Obama again will just sit on the sidelines. Obama will get reelected because the people in my generation and behind me (I am 42) will vote for anyone but a republican and not do the necessary research to pick the right candidate. Obama in office will polarize Congress even more and the American people will lose in the end. Without confidence in the American future, the markets will tank but create great opportunities for Fly, Chess, and RC to lead us to massive wealth (as long as we go cash when Chess says goto cash)
OEW Daily Recap:
“The SPX opened at a new uptrend high today, made a new bull market high, and then pulled back. The NDX made a new bull market high as well, but the DOW/NAZ did not. The divergence between major indices, futures/cash, and profit taking in AAPL helped to create the largest pullback since the first few days of August.”
“With the DOW failing to make a new bull market high today, and then breaking the lower rising trendline, we need to be a bit cautious if the SPX drops below 1410 and then 1407. The low today was SPX 1411. A break of these levels would suggest a completed Minor wave 3. Then probably an oversold daily RSI would be next for Minor wave 4. But if the SPX breaks 1375, then the uptrend from 1267 is probably over and, the DOW’s diagonal comes into play. This would suggest a retest of SPX 1267 would follow in the weeks ahead. The key levels: SPX 1410/07 and then 1375.”
“Short term support remains at SPX 1413/15 and then 1402/03, with resistance again at 1422 and then the 1440 pivot. Short term momentum hit extremely overbought today, then declined to oversold. The short term OEW charts remain positively biased, from under 1370, with the swing point now around SPX 1410.”
The most recent thrust up after a very calm time consolidation bodes well for higher.
Miners have been beast. There’s a massive speculative base (assumption) tied to those names and the underlying resources. Financials have rocked too.
Most equity assets are hanging out on the top of the channel, no matter how you draw/calculate it.
$NYMO is playing along higher, TLT could churn and not thrust but is important to watch and the $USD looks choppy with a slightly bearish edge.
All this to say I’m bullish and I could really enjoy evaluating a dip to determine conviction.
Through election day? No idea.
But I went long VXX yesterday as it has set-up for at short-term pop. May short XLE today as well.
I’m concerned about possible topping in equities but am still finding reasonable trade setups … Tuesday’s action is a concern with reversals in equities, vix and tlt … allstarcharts.com has a great writeup … long term it can go either way but whatever happens will be well telegraphed in the dailies ….