Each year I have offer an “outlook” at the beginning of the year. I use this as an opportunity to highlight some of my macro opinions, highlight some of my better stock ideas for the year, and lay out an overall game plan for what I think lies ahead for the market.
Back in January, I made two important macro calls. “Look for big upside in Emerging Markets, and China.” I labeled China my “wild card for 2014.”
Take a look at the Shanghai this year.
I view this move as an important one. The Shanghai has confirmed important market moves ahead of the $SPX. It topped before the $SPX in 2007, bottomed in 2008 before the $SPX did in 09, signaled the top/bottom in 2010, and signaled the 2011 top ahead of the $SPX. Granted, there has been an ongoing divergence between these two instruments for the last few years, but the rally here in the Shanghai is staggering, and is breaking away from a multi-year balance/range in the index.
The two instruments trending together in my career has offered easier trading conditions in terms of breadth. More stocks participate in the rallies. I would keep an eye on the EEM and FXI/$SSEC as they’ve been pretty useful in the past to predict market weakness/strength.
OA
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Shanghai also never really recovered nearly anywhere towards its 2007 highs.
The Shanghai went through our year 2000 back in 2007. Blow off top.
NASDAQ hasn’t recovered from its blow off top either…but getting close.
Nice.
OA, I peeped this yesterday, and viewed it as a bad omen. Didn’t say anything in hopes that maybe the market gods wouldn’t notice. Surely Mr. Jeremy will get his Saturn out of impound sometime this morning, and we rally into the close… http://m.autoevolution.com/adult-industry-star-ron-jeremy-gets-his-car-impounded-86184.html
OA what are your thoughts on the shippers? You mentioned waiting for a pullback. I like balt / nm / sb
Still feels early. Out of those I would start with BALT.
I kept my losses small and cut trades that weren’t working today as well as took some unrealized profits in an effort to protect capital. I’m taking the rest of the day off and am looking forward to a relaxing weekend and a fresh perspective and plenty of new cash thanks to AHWOA to put to work when more high probability trades present themselves.
XNET continues on. I’m hoping this will be my “twitter dec 2013” type score.
OA. $VRA was beaten down after last earnings and is just starting to move out of rounded bottom. Earnings Tues before the bell. What is your opinion on an earnings play here?
Forgot to mention…40% float is short according to FV.
ACH practically a dead ringer for $SSEC, stalking it and YZC on pullbacks
Great analysis as usual. China topped with the Olympics taking basic materials down hard. What sectors would you expect to benefit most with a continued recovery of the Shanghai?
This is what prompted my positions in X and AKS. I missed my AA/CENX longs last summer.
OA, thoughts on WFM here?
Kind of interesting: my local electric company wants to install & maintain moar solar panels on residential rooftops at no charge… hmmm http://www.insidetucsonbusiness.com/news/tep-proposal-could-mean-more-solar-power-in-tucson/article_956028d2-34c7-11e4-8fd5-0019bb2963f4.html
OA thanks for your reply on the shippers. Do you think a double bottom is an ideal entry? wouldn’t the thesis on china rallying hold true for the shippers as it did for X?
Also what do you think of JCP and NBG here?
Well, I wish I could claim much success, but I can’t. Even after recent GOOGL, YELP, and TWTR wins, position after position on my Sept book is looking ugly. AWAY, ONVO, SINA, VNET, LULU, SCTY, XONE, BAC, SODA, UCO, WB, PCLN….all of these had good setups (to me) that have failed or given up the gains. The rate of failure in these setups right now is too high. Can’t seem to catch an upswing without a major downswing, and the sector rotations are occurring too fast to let anything run. Hate to be a Debbie Downer, but I don’t have a ra-ra story. Things may bounce here, but I think my trading days are done after September expiry.
hey i just saw a couple vivint solar trucks driving around manhattan beach – cmon OA bring this fucker out!
Hi OA,
Are you in agreement with the fly in regards to a significant pullback for the market in general in Sept.? Was thinking about gambling with some TNA puts?
thanks!
No.
Was anyone here following the options market closely back on Monday Sep 10th of 2001?
If anything goes down this year or next, OA may be the first to notice “unusual” trading patterns from around the world days or weeks in advance.