Everyone is mesmerized by the NIKKEI’s 7.3% drop last night, wishcasting a similar fate to western markets, particularly ours. According to the stock market handbook, the market is supposed to trade lower now, for an extended period of time–coinciding with memorial day and the summer plans of hedge fund managers. The only people who will be left at the trading turrets, in about three weeks time, are 2nd tier analysts and 3rd rate money managers, and of course yours truly.
The natural drawdown scenarios dictate the market will drop by about 10% from current levels, in order to clawback from the stupid money. You must understand, the money made by stupid people over the past 3 month, especially over the past month, is supposed to be destroyed by Mother Market. Stupid money is always designated to self-destruct.
Knowing that, coupled with the fact that you’ve made good money over the past 3 months, are you selling into weakness today? Or, will you buy the dip, believing that we can never trade lower again.
I don’t have the answers for you just yet. Timing tops is the hardest thing to do, aside from climbing Mt. Everest. I am heavily exposed to the long side, but crazy in the head too. I have no problems with drawdowns. I wish I could say the same about clients. They tend to loathe them. But that’s why I am the professional and they’re just market fans, cheering from the sidelines, like small school girls rooting for their favorite quarterback.
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went to all cash yesterday…looking for new ideas
To the FAZMOBILE ?
Your IBC bloggers are smart ‘Will SPX Top At 1686.41?” http://ibankcoin.com/thefreemarketcapitalist/2013/05/14/will-spx-top-at-1687-41/
yes indeud… smarter than the average bear/bull/yahoo finance message board/chronically late to the party stocktwits twitter pumper
Excellent synopsis of the mood, Sir Fly. Long a couple names with catalysts, but watching and waiting to see what to do.
The proctologists call this kind of strategy, “Watchful Waiting”.
Loving it… big shopping list, hope for some quality names on sale.
How big of a sale do you need to fill the list?
I’d love some GOOG at 800
Strength today will prove the Bernank fueled SP500 to be a feat beyond comprehension – until, of course, he must exit.
And then it will be a procession of pain for all involved – apart from everyone who is obviously only buying here with ‘tight stops’
Today in Asia, many with ‘tight stops’ were filled 5%-10% lower
Wouldn’t affect anyone around these parlours I wouldn’t assume
It’s a bull market
Doctor Fly – how many of your clients read your blog?
ZERO
I am anonymous.
I sold everything on tax day. It was the end, you know.
If your scurred, write ITM covered calls and collect premium. In these parts selling is restricted to drug dealers and prostitutes.
I think we correct 10%… yet into the fear, I took off half my SPY weekly puts and half my June07 puts today. Grabbed some AAPL weekly 445 calls. May grab some longs while hanging onto my Calls in the UUP and remaining puts.
WETF got some at 12.44 on your blog…buy the blood