Big Cap Update

I cited some data that suggested yesterday’s sell-off was rather girly and highly un-menly.

Lets look at stocks over 50b that are up or down more than 2.5%:

These numbers are not egregious.  During a real menly man’s selloff, you will see many more down than just the 7 listed here (for reference there are 128 stocks > 50b in mkt cap)

Today there are 46 / 128 stocks with a market cap of greater than 50b moving up by more than 2.5%, 35.9%.  This is a TON of money, not smallcap players, which is why we look at this.

I don’t use this stat to “predict” the next days direction but rather, get a sense about how serious big players (pensions, MFs, etc etc) are about today’s direction.  Today?  They seem enthused.

The Great Underwater Bear Massacre of 2010

Today’s market is exactly what I like/expected/build effigies for.  Dips being bought, horseless FAZ carriages being driven unbridled into the sea, namely, it’s glorious.

And to top it off, a fresh “your dead” breakout in the S&P, Gold, Silver, all with my market indicator remaining firmly bullish, guiding us all towards the light.

I will end this brevity with a question — if you didn’t trade or understand the market well during this recent cycle, which has been one of the most painless rallies ever if you were set up for it, then what measurable steps have you taken to review your trades, and figure out where your biases and assertions led you astray?

If you don’t do this, you’ll have no idea where you went wrong and it will be much harder to learn and become a better trader.

http://farm1.static.flickr.com/215/451355810_20b00f49d2_z.jpg?zz=1

Market Slips on Late Day Slide

I love that title.  I admit I’ve used it before.

It may sound innocuous, oh, just some fat little a-hole losing his step on a jungle gym out there, but really it’s a shitload of money leaving the equity markets.

OK.

So we’re experiencing our first major sell-off since the dawn of the gilded era.  Fair enough.

What to make of it?

Thus far, the sell-off does not appear to be the game changer for this rally.  It could/should signal a needed rest.  The market was too extended to find any more VHCs which, if today is any indication, is startling the shit out of land lubbers.  Plus, the market has been very strong, as holders of TZA will attest in reverse, and any kind of dip will most likely be bought.

Why do I think this?

Lets look at stocks over 50b that are up or down more than 2.5%:

These numbers are not egregious.  During a real menly man’s selloff, you will see many more down than just the 7 listed here (for reference there are 128 stocks > 50b in mkt cap)

Let’s look at sector rotation:

66/239 Industry groups are lower on the day, or a shameful 27.6%.

6 /239 industry groups are down more than 2% today.

All in all, I am REALLY happy that the market is pulling back here, bc it is much better for bulls. The move over the course of Sept. was very powerful and it’s really going to take some oomph to flip that.

I mean, take a stock like INFN.  The stock is clearly in an uptrend.  Give it a few weeks, and another buyable setup will occur.

First Thing In The Morning

What is the first metric or indicator or stock or whatever that you check every morning?

For me, I immediately glance at /ES, then intraday tick.  Then on to my regular routine.

You guys?

Dear My 17 Readers…

You’re welcome.

No doubt you have missed this down move from the relative comfort of your hammock and mimosa made with that $2 Andre.

Lord knows — I have.

In short – it’s as simple as following a stoplight.

Don’t tell me you were unaware.

Please stop by again,

- The Mgt.

A Quick Point…

I had reason to suspect that we’d get a positive close today.

I think my point was valid.  I know it is.  Hell, it’s valid for tomorrow too.

But look what I just said.  Reason.  Valid.  Know it is.

Clearly not.

Leave your reasons and subjectivity at home, and pay attention to the math.

My Breadth Indicator was clearly negative.  I emphasized that.  Don’t lose the forest for the trees if price action and suppositions call for a 1 to infinity point bounce but the sophisticated tool I use to measure market health is poor.

You want to be on the right side of the trades, follow my breadth indicator.  It’s outsmarted every prognosticator, from the getting in on the February rally, to getting out at the end of April, before the flash crash, to not even buying the dip for a bounce until we actually had one for a week or so.

That’s pretty fucking excellent if you ask me, which is why I give so much credence to its readings, more than “what I think.” Once you realize “what you think” is subjective and a guess, you will feel more comfortable “trusting” a finely tuned empirical measurement of the market’s health.

One more point…there’s nothing wrong with guessing or supposing. What I think it wrong is betting on such suppositions. Even though I felt a bounce would come, I didn’t bet that one would materialize, I merely expected it. That’s the difference between losing money and being wrong.

Big Cap Update

I cited some data that suggested yesterday’s sell-off was rather girly and highly un-menly.

Lets look at stocks over 50b that are up or down more than 2.5%:

These numbers are not egregious.  During a real menly man’s selloff, you will see many more down than just the 7 listed here (for reference there are 128 stocks > 50b in mkt cap)

Today there are 46 / 128 stocks with a market cap of greater than 50b moving up by more than 2.5%, 35.9%.  This is a TON of money, not smallcap players, which is why we look at this.

I don’t use this stat to “predict” the next days direction but rather, get a sense about how serious big players (pensions, MFs, etc etc) are about today’s direction.  Today?  They seem enthused.

The Great Underwater Bear Massacre of 2010

Today’s market is exactly what I like/expected/build effigies for.  Dips being bought, horseless FAZ carriages being driven unbridled into the sea, namely, it’s glorious.

And to top it off, a fresh “your dead” breakout in the S&P, Gold, Silver, all with my market indicator remaining firmly bullish, guiding us all towards the light.

I will end this brevity with a question — if you didn’t trade or understand the market well during this recent cycle, which has been one of the most painless rallies ever if you were set up for it, then what measurable steps have you taken to review your trades, and figure out where your biases and assertions led you astray?

If you don’t do this, you’ll have no idea where you went wrong and it will be much harder to learn and become a better trader.

http://farm1.static.flickr.com/215/451355810_20b00f49d2_z.jpg?zz=1

Market Slips on Late Day Slide

I love that title.  I admit I’ve used it before.

It may sound innocuous, oh, just some fat little a-hole losing his step on a jungle gym out there, but really it’s a shitload of money leaving the equity markets.

OK.

So we’re experiencing our first major sell-off since the dawn of the gilded era.  Fair enough.

What to make of it?

Thus far, the sell-off does not appear to be the game changer for this rally.  It could/should signal a needed rest.  The market was too extended to find any more VHCs which, if today is any indication, is startling the shit out of land lubbers.  Plus, the market has been very strong, as holders of TZA will attest in reverse, and any kind of dip will most likely be bought.

Why do I think this?

Lets look at stocks over 50b that are up or down more than 2.5%:

These numbers are not egregious.  During a real menly man’s selloff, you will see many more down than just the 7 listed here (for reference there are 128 stocks > 50b in mkt cap)

Let’s look at sector rotation:

66/239 Industry groups are lower on the day, or a shameful 27.6%.

6 /239 industry groups are down more than 2% today.

All in all, I am REALLY happy that the market is pulling back here, bc it is much better for bulls. The move over the course of Sept. was very powerful and it’s really going to take some oomph to flip that.

I mean, take a stock like INFN.  The stock is clearly in an uptrend.  Give it a few weeks, and another buyable setup will occur.

First Thing In The Morning

What is the first metric or indicator or stock or whatever that you check every morning?

For me, I immediately glance at /ES, then intraday tick.  Then on to my regular routine.

You guys?

Dear My 17 Readers…

You’re welcome.

No doubt you have missed this down move from the relative comfort of your hammock and mimosa made with that $2 Andre.

Lord knows — I have.

In short – it’s as simple as following a stoplight.

Don’t tell me you were unaware.

Please stop by again,

- The Mgt.

A Quick Point…

I had reason to suspect that we’d get a positive close today.

I think my point was valid.  I know it is.  Hell, it’s valid for tomorrow too.

But look what I just said.  Reason.  Valid.  Know it is.

Clearly not.

Leave your reasons and subjectivity at home, and pay attention to the math.

My Breadth Indicator was clearly negative.  I emphasized that.  Don’t lose the forest for the trees if price action and suppositions call for a 1 to infinity point bounce but the sophisticated tool I use to measure market health is poor.

You want to be on the right side of the trades, follow my breadth indicator.  It’s outsmarted every prognosticator, from the getting in on the February rally, to getting out at the end of April, before the flash crash, to not even buying the dip for a bounce until we actually had one for a week or so.

That’s pretty fucking excellent if you ask me, which is why I give so much credence to its readings, more than “what I think.” Once you realize “what you think” is subjective and a guess, you will feel more comfortable “trusting” a finely tuned empirical measurement of the market’s health.

One more point…there’s nothing wrong with guessing or supposing. What I think it wrong is betting on such suppositions. Even though I felt a bounce would come, I didn’t bet that one would materialize, I merely expected it. That’s the difference between losing money and being wrong.