iBankCoin
The first hit is always on the house.
Joined Aug 2, 2009
1,847 Blog Posts

OVERSOLD SIGNAL IN SMALL CAPS TRIGGERS BARBARIC RALLY

Small caps are up for the 7th consecutive day for only the 4th time in 5 years. The last signal I referenced in 2012 triggered 8 out of 9 days of consecutive gains, but 5 months of nearly uninterrupted gains before pulling back.

Watching the experts circle their wagons now is so painful to watch. This has all been so predictable, yet the pundits are so fucking retarded. I’ve broken this market down in so many ways since fall of last year to show not only why this was going to happen, but also how this would all be made possible.

Now that everyone has additional clarity or “confirmation”, they are all free to adjust and postpone their market death sentence until further notice. Lol.

What’s going to happen next year will require more attentiveness and focus than this year. It was easy to buy when nobody else bought. Now that we are supposed to welcome in the unwelcome, I think there will have to be an element of creativity to take positions after this new found crowd gets slapped around a little. In other words, I want to be more open to the pain trade process for individual stocks going into next year. Buy failed rallies, wait for breakdowns, etc.

I jumped on some $GOOGL, $WYNN, $SBUX calls and $CBI stock yesterday. Today, I booked some $LABU and bought up some $TWLO, $AAPL and $NFLX calls along with $GOGO stock.

I have a John Holmes sized watchlist here, but am waiting for respectable prices.

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25 comments

  1. traderconfessions

    Anyone watching what’s going on with DRYS…. just insanity.

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  2. Richard Chmara

    Your call on small caps makes sense. Do you see the overall push to continue simlar to 2012 or maybe even longer?

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  3. cascadia

    It sure looks like everyone is overblowing the inflation play. Even during the last housing bubble with oil over $100/barrel, inflation barely touched 3%.

    Suddenly, inflation is going to overcome commodity prices on the floor and housing prices that are maxed out on historically low rates?

    What do you people think will happen to housing prices when mortgage rates go up?

    Me thinks an infrastructure package driven largely by tax breaks is not going to create a booming middle class, and thus, a stronger housing market or consumer discretionary demand.

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    • greenlander1

      Who cares as long you are on right side of the trade. This is money falling out of the sky right now.

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    • mx2101

      I think the housing market question is a good one because people may be motivated to participate if the trend changes. Buy or sell.

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    • MSGT HARTMAN

      The ChiComs are buying houses like hotcakes in my area. $350k for an apt is cheap.

      And remember my thesis: The US doesn’t buy China, China buys the US…

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      • cascadia

        This is becoming more true. China just made a requirement for 70% down on a second house. Money be flowin’ from China…

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  4. ThomasJefferson

    Freaking $CARA. I got out-smarted by myself.

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    • ThomasJefferson

      Long $DBA Jan2018’s.

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    • greenlander1

      Yeh think there are a lot of ppl who did that this week. I sold most of my WFC when it was at 50-51. Then watched it blast up to 53

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    • tweek

      ThomasJefferson. Me too, sold on the underside of 10. Didn’t think it would have the strength to get thru that level. So bullish

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  5. sethster99

    VIX still over 13. Needs to drop to the low 12s before we have a significant sell-off IMO. I

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  6. Richard Chmara

    OA. At what point do we get another shot at China or Emerging Markets? Would it be a theme for 2017 or later? I know the Chinese Social Media was a theme.

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  7. traderconfessions

    ZEN looking tasty. Worth watching.

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  8. kamel

    Liking the consolidations many things I am watching have been going through this week. Looking like things are going to have to resolve soon and I like resolution.

    What is your take on the bond market? Obviously, there was some unwinding, but this doesn’t look like the big unwind

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  9. Nocturne

    Shorted PG at 83.59. Cross below monthly 10 period EMA as it rejected a retest of 200d MA.

    Shorted oil via SCO at 85. 95

    Still long Natgas via short 7.00 dec puts

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  10. matt_bear

    based on your blog post views and comment amount, this is around the sweet spot to initiate option positions in the OA cycle…..might have been yesterday.

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