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
23,445 Blog Posts

EXTREME OVERBOUGHT CONDITIONS PERSIST

Naturally, I am about to take the other side of the popular trade. Two weeks ago, most of the internet proletariat was bearish, as the indices hit new lows. I went long and made a bundle. If I was properly motivated, WHICH I AM NOT, I’d bet large on a pending reversal. Credit default swaps for Spain are blowing out and the wolves will not stop until the EU is forced to cut rates and/or cut cheques.

Plus, The PPT has never been more extended as present conditions indicate, with more than 84% of large cap stocks ranked buy. Also, the hybrid score has advanced a record 7 days. The previous record is 5.

I am a big believer in setting new precedents. At the same time, I believe in my system, mainly because it has made me millions of dollars, literally. However, I am very open to the idea that it will miss this move and the market will keep marching higher. Like I said, I am open to the idea. However, if history is our guide, it is not likely.

This motherfucker is going to pause, then drop hard, similar to one of those spazzed out rides that you idiots go on, at your local “amusement park.”

Needless to say, I will continue to liquidate longs into strength, until my allocation is 50% cash, 15% VXX, 35% long.

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74 comments

  1. checkersNbeer

    ok

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  2. Bullish

    Still unable to preorder my iPhone 4… Will you please call Steve Jobs for me… Help a brother out

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  3. Bullish

    Still unable to preorder my iPhone 4… Will you please call Steve Jobs for me… Help a brother out

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  4. boogster

    One thing that I noticed about these indicators that mark tops and bottoms is that they rarely work in strong trending markets. In volatile markets, yes, but strong trending markets, no. Instead of marking tops and bottoms, the indicators confirm strength or confirm weakness. I am basing this on the McClellan Oscillator though and not your indicator. You probably don’t care though, since I am nobody.

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  5. GETGroup

    Indeud…that’s all I have to say about that

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  6. Thy Name Is Gary Kaultbaum, They brain; small
    Thy Name Is Gary Kaultbaum, They brain; small

    boogster: we are not in a strong trending market. we went down fast. we sent somewhat sideways. We have now popped a bit.

    refresher: strong market = not this one. its the other one, the one you missed that you are thinking about.

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  7. Bond

    2010 markets thumbnail analysis….
    Equities….big big ass short coming over the horizon
    Commodities….long to the max since the human virus continues to ravage the earth for resources
    Real Estate…..you gotta be kidding-short to the max on a double dip hit coming to your locality soon
    Bonds…..the most overvalued asset class in history as we camp in the era of unlimited quantitative easing…short
    Currencies….they are running out of paper….short em all
    Gold……to the moon Alice….I mean Jupiter’s moons…backing up the truck on EVERY pullback
    Fly and company……hell of a great site..I get entertainment with dinner…thanks guys

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  8. igamblecoin

    Speaking of strong trends, I’ve noticed one of late – the comment sections being riddled with ADD.

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  9. Mr. President

    LOADED up on more VXX, into the bell. I have no problem holding for the drop that WILL inevitably come. I still have some old VXX. Waiting for the “full FAZtard selloff”.

    Look around, people. Survey the landscape. Do you really see an emphatic leap up to 11k, where we will stay and party whilst dancing around like homos?

    We’re still up to our eyeballs in filth.

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  10. tgarfield

    what if it goes sideways, then will overbought work off?

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  11. chalacio

    I like FLY’s combo 50-15-35.

    It reminds me of my gf.

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  12. tgarfield

    VIX should just bump under 24. 23.50-23.80

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  13. HuggieBear

    I plan to FAZ the fuck out when the market hits 1125 intraday tomorrow prior to the predicted reversal.

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    • HuggieBear

      One problem though — i am worried they will not allow my June puts to become ITM this week. I realize this fear may be irrational, however, prior history and experience indicates that it may be true. I need a 3% market dip for most of my prior hedges to finish the month decently ITM. We most likely will collapse 2% – 3% monday.

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      • HuggieBear

        love that scene, and movie in general….not sure i get the connection though, are you predicting i will receive a smack-down when i go short?

        You may be right.

        Truth is i will be on the golf course the next two days…im hedged about market neutral right now….so looks like i will be flat for the next couple of days. Unless the market takes a giant dip I might make bank some coin on those far OOTM puts.

        Anyway, still, i do believe 1125 – 1150 is good shorting territory, if you’ve got some patience. I would cover above 1160 most likely though.

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        • arch

          probably give some back tomorrow might help a little…what options ???

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  14. wilmer

    Shorts got fried on this move. Every dumbass with a chart was predicting 1020 S&P.

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  15. Dr Fly

    Obama using gom crisis to power grab the oil industry. Fucking absurdly predictable

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    • igamblecoin

      The gov’t is getting so fucking far in over its head it’s frightening.

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    • Purdy

      What? That milquetoast happytalk about listening to all ideas about energy. He grabbed nothing. He said nothing.

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  16. hammer

    There once was a market overbought
    VXX and FAZ shares were eagerly bought
    When the bell rung
    Those that were hung
    Cashed in on the profits they sought

    ok…I think I drink too much.

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  17. rookie

    the more and more i follow the market the more i realize it doesn’t give a shit about fundamentals.. until it does… most of the euro crap has been priced in and even if it hasn’t the euro *will* rise to 1.25 because that’s what the charts/technicals say… commodities will rise along with it and the market will rise rise rise..

    thanks fly.. ultimately your call will be correct but for now party on.

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    • arch

      i just get the impression hes not the right man for the job

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    • Cascadian

      Another NYC dude. Michael Weiner that is. But he’s kinda right in a way, partly.

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  18. tradingnymph

    OMG, this is So cool, you know I hang with the F/Xer’s…anyway Sean linked my KOPG China Boat article into his blog, OK bash away, but I still think it is cool….. http://www.forexlive.com/113312/all/chinese-holidays-to-blame-for-lack-of-action-this-week/comment-page-1#comment-79307

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  19. Rubber

    fly i told you the PPT overbought score does not work in long rally for example recent rally from 2/25/10 to 4/26/10. please kindly confirm

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    • Dr Fly

      Worked like a charm a few weeks ago. It hits more than it misses.

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    • TA

      Like all indicators of it’s type, it can easily hit mutliple +3.00s in a row before changing direction.
      If it was perfect, everyone would use it and it would lose it’s accuracy.

      It’s just a guide, skill is still required.

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      • Bullish

        Its a time machine! It’s better than Gray’s Sports Almanac 1950 – 2000 edition

        My take on the PPT for the short period of time I have been learning about it is very positive but it can’t be exactky accurate

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        • shaz

          Now Biff…I want make sure that we get two coats of wax this time.

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        • Cascadian

          Fly keeps a little of the accuracy held back for himself, kinda like the Government and the GPS system. So he can continue to outperform all the rest of us.

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    • Woodshedder

      Any overbought/oversold indicator will work better during periods of medium to high volatility, not so much in low volatility environment.

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  20. Bullish

    Bullish finally ordered his iPhone (14 hrs later)… peace has returned to this land

    Market going higher… ride the wave

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  21. Pathetic

    Its fucking pathetic to read all the drivel here from the peanut gallery. You are doing the most predictable and lame thing that you can, you fuckin morons. Criticize the shit out of the Prez. Its easy, isn’t it? Oh yes – he has been our Prez for the last 100 years and all the problems originated when he was holding office, right? And now he is just trying to clean up his own shit. Hell …check his records…he probably owns BP too! I guarantee you that if his speech was totally different, you would still find a way to drop shit at him. You know why…because you are probably sitting in your mommy’s basement, eating stale dorritos and really want some excuse to blame someone else for your otherwise pathetic life. You masturbate at Rush Limbaugh’s voice and fuck each other while watching Sarah Palin read her palms and drop more shit at the Prez like this was some kind of a soap opera shit.

    You fucking losers! You fucking traders …all fucking right wing nuts!

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    • JakeGint

      On the bright side, you’ve chosen an apt moniker.

      _________

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      • Pathetic

        Because that is how I feel, genius

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        • JakeGint

          How you “feel” is exactly what has gotten us into this predicament in the first place.

          Next time, when you approach the voting book, try thinking.

          Or better yet, spare us.

          _______________

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          • JF2

            Jake, of course you would respond to this sort of pathetic rant, and of course you would imply that one party is solely responsible for the degenerative state of the country. You and your naively biased political views fucking crack me up.

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          • Cascadian

            Pathetic made the rant. Jake’s point of reacting rationally rather than emotionally was well made.

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    • Cascadian

      We learned from all the Bush bashers of the last decade. It’s easy to do, you are correct. Now let’s just keep bashing each other instead of getting real and fixing some shit. Being re-elected is way more important than fixing real shit as it happens.

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      • gappingandyapping
        gappingandyapping

        No politics here or you will be banned. Swiftly I might add.

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    • Mr. President

      Please, Pathetic, enlighten us more.

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  22. JakeGint

    Remember this important allegory, in the land of legless horses, the three-legged horse is King!

    ____________

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    • Maelstrom01

      Good point..and by dint of that logic in a nation of morons Alfred E Neuman becomes president and is proclaimed a genius by adoring idiot masses….pathetic indeed..Community Organizer = President=Fool

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  23. HuggieBear

    Listen,

    The rain in Spain stays mainly in the planes. Except when it doesn’t. Except when it provides a shitstorm across the entire Euro region and threatens global contagion.

    That, my friends, is the word of the day.

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  24. Henry Fool

    will sell some DVAX @ 2.72 this week.
    http://henryfoolspicks.wordpress.com/2010/06/16/will-sell-some-dvax-2-72-this-week/

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  25. Le Fly

    President is a criminal. And i am no right winger.

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    • Purdy

      ….and if you don’t believe me, I’ll waterboard your commie ass.

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    • wilco

      Your President.

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    • Mr. President

      He will ruin us.

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    • HuggieBear

      why the sudden right wing acrimony? what makes him a criminal?

      i see the guy as basically being fucked…there is nothing he could possibly do where he wouldn’t have about half the idiots in this country (thats half of everyone, by the way) mad as hell at him and calling him a criminal.

      worst job ever.

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  26. Mr. President

    This is the beginning…what I’ve been waiting for…
    Yesterday was the buyers’ last hoorah.

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  27. HuggieBear

    By end of day yesterday, it didn’t feel like it, but I’m beginning to think i may have played this last few days to perfection.

    I’m not touching anything i own for the rest of the week. Maybe.

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  28. Kreizi

    I love today’s statistics. Bearish as Putin’s speech in the UN.

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  29. Barack Obama

    I have ordered the market to trade higher regardless of where the PPT thinks it should be.

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  30. Black Gold

    “ATPG” doesn’t seem to care the markets are red.

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