iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,429 Blog Posts

We’re Not Out of the Woods Yet

I know the market appears to be constructive now, especially since we’re near new highs and all of the high beta stocks are rallying again. However, as of now, we are simply dead cat bouncing. The reason why I can say that with absolute certainty is because it’s true. The biggest losers over the past three months are now the biggest winners. All you have to do is screen for stocks down more than 30% over the past 3 months, and layer atop of that some technical factors and price action magic and voila: you have yourself a nice winner.

Be on guard for false breakouts.

As of now, I am still in the camp that this is simply a respite, along the lines of 2000. This is the bounce after the dip. We will rally until late June, then sell off through July. The market will, once again, rally in August, topping out in September, then enter a most horrendous and miserable Samsonite Hamburgalar bear market through December.

I can only hope to recover half of my losses, realistically. Perhaps by August I will be in a position to short stocks and double my gains as the market vomits on itself, salvaging my year. There is a long road ahead of us. Try not to let your weak-minded emotions get in the way of seeing things clearly.

NOTE: The PPT‘s 7 day hold on the QQQ’s, which was closed out yesterday, was sublime.

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12 comments

  1. ironbird

    Beats is worth anything as long as trillions more in student loans gets puked to the kids. Degrees as fire starters for the win.

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  2. weezy1

    “The market will run into late June,sell out in July pop in August sell off from September to December.” If only it was that easy.

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    • Dr. Fly

      But it is that easy.

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      • NON Solo

        Fly, aren’t you going to wait until the Fed ends their QE after October and see what happens to interest rates?

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        • the_last_pumapunkanite
          the_last_pumapunkanite

          I thought home ownership was supposed to go up before they stabbed out eyes with sharpened pencils

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          • NON Solo

            Home ownership rates are 80’s levels I believe. I live in Chicago, rental rates are out of control here. Institutions are buying houses, not individuals. Individuals are renting here.

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          • it is showtime
            it is showtime

            Majority of “new home” data starting to become apt/multifamily

            They PEAKED out the housing market again. Rent is just beginning to show declines. Because THAT reached a saturation. The large demo babyboomers DOWN sizing without generational replacement. Housing will contribute to recession trigger again

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  3. the_last_pumapunkanite
    the_last_pumapunkanite

    geez…Dr. Grinch over here with his Kill Santa Rally

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  4. budh

    If what you say is true than one should sell everything tomorrow!

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  5. mojo

    7Y Treasury yields cracked below 2% for the first time since Nov 2013.

    GDP rev is out tomorrow.

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    • it is showtime
      it is showtime

      Is expected -0.5 so it won’t be a surprise even though does reflect a Q2 that won’t be much higher

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  6. Mr. Partridge

    Not sure about the woods thing… I have never been in it to begin with and so most money managers I know, actually all money managers I know – perfect year so far – not many people buy momentum overvalued stocks I guess.

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