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I'm not in love with the market here.

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February 28, 2011 – Comments (22)

First and foremost, I am tired of token hot women on CNBC.  Really?  I mean, REALLY?  Second, I am not to be considered a great market timer.  I accept that at this time I do not have the experience to manage that kind of feat. 

All that noted, I don't like the market right here very much, and I'll share why...  

1.  Wall Streets net long position in oil futures is at a record high.  

2.  Oil has good momo

3.  Oil has "a good story".  Whehter hte story makes sense or not doesn't matter, its whether it has basic sex appeal on a quick listen.  Tech had a great story.  In early 2009 negativity had a great story.  "a good story" has alot of power, and right now oil is an easy 1 or 2 sentence sell. 

4.  so I think the risk of an oil spike is tangible.  Its also worth mentioning that fundamentals don't really support prices up here, and as bullishness on oil reaches some extreme highs, that does set us up for a drop at some point.  But the risk of 1-3 above creating a self fulfilling prophecy for a time is tangible, and taht could easily send the markets down. 

5.  Treasuries have been quitly rallying for awhile now.  That was one of the warning signs of the correction last summer. 

6.  The leaders of the recent rally have backed off alot.  Commodity and momo stocks (nflx, amzn, tck, fcx, etc.).  That was one of the warning signs last April also (it was financials then)

7.  The market is simply due for a good solid face-slapping

It could go either way, in my view.  So I am not deploying my cash hoarde at this time.  In fact, since the recent downturn began I have bought some hedges and been a net seller.  I did add to my short positions in some levered bear securities...  but those are a different kind of trade and not for the faint of heart.

So, for now, I sit.  I may buy some hedges into a "first of the month" rally tomorrow. 

I am more than willing to wait for the correction I have been looking for, as I know exactly what I want to do into it...  I just don't think last week was the correction I was looking for.  

As a parting thought to this fairly useless set of comments...  April 2010 had several interesting things that lined up before the summer panic began:

1.   treasuries (still the worlds biggest flight to safety asset) bottomed before the market turned down

2.   the leaders (financials then) stalled before the broader market did

3.   several commentators worth listening too had warned of volatility spike possibilities including "The Fly" and Jeff Saut

4.  the market exhibited some significant up/down chop (the hard selloff on GS news, then an immediate rally to new highs, hard selloff, brief strong bounce...  and then the meelee began in earnest

5.  the markets flipped out, very briefly, over govt debtand finances, but then simply ignored it for a long period of time and marched higher.  Then, interestingly, that was exactly what they flipped out about all summer.

6.  Deflation had been a quiet whisper over much of 2010, but over the weeks before the panic (which ultimately manifested itself as a deflationary scare) that whisper had grown to a hum...

I think the key to catching a downdraft in the market is to lock onto that quiet whisper as it grows to a hum.  We have seen over the last 2 years that people yelling "overbought" is a poor indicator of a top, we've seen that momentum can go on for a great long while.   But have we also seen that quiet whisper-to-hum be a good predictor?  Was their a bullish whisper growing to a hum in early 2009?

Maybe.  Prechter suggested covering shorts, Kass called a bottom, "The Fly" suggested buying for a bounce, Riholtz suggested buying, economic data had shown some signs of stabilizing, several of my stocks had rallied hard after earnings only to go back down with the tanking market.  Frequently bearish Art Cashin commented that we were due for "one heck of a rally".  Maybe, if I had been more in tune with things and not so "green" I could have spotted that whisper-to-hum.  

What is the whisper to hum today?  Honestly, I don't know.  But if crude drops, the market rallies, and mid-east tensions go on for awhile with Wall Street ignoring them, that may well be a signal to act more aggressively with respect to hedging and preparing for a possible return-to-focus of Mid East tensions.  Maybe the interim between Egypt and Lybia was already that window-to-prepare, and I somewhat missed it.  

I know that is extremely intangible - this whisper-to-a-hum talk - but its someting I've been thinking about since last summer.  I caught, from reading blogs and stuff, the growing hum of deflationary talk.  I didn't act on it or properly prepare then...  I will honestly say I haven't caught any of that whisper-to-a-hum vibe this time around, except... maybe... the whole rising commods leading to a slowdown discussion.  

It may pay to prepare if we get a significant lull/distraction from the "rising oil" fear.  

22 Comments – Post Your Own

#1) On February 28, 2011 at 3:11 PM, L0RDZ (81.88) wrote:

Perhaps I didn't  understand ?  but I'm all for more hot women on CNBC, heck put on some lip stick, eye linner,  and wigs for some of the men while you're at it.

So who are the token hot women ?  your talking about ?

 

 

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#2) On February 28, 2011 at 3:15 PM, checklist34 (99.72) wrote:

lol, LORDZ. 

I'm all for looking at hot women, but why do we need to stare at them when pondering serious things like markets and our investments?  It seems inappropriate.

Its like if you were working hard in a lab trying to figure something out and your buddy showed up, drunk, with a bunch of pretty girls.  I like drinking, and I like pretty girls, but ferpetessake not THEN.

If I'm the oddball out Iwill accept my lashings dutifully.

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#3) On February 28, 2011 at 3:16 PM, Valyooo (99.54) wrote:

" Wall Streets net long position in oil futures is at a record high"

Where are you getting that from?  I would like to know, so I can see what happened after the last time it was near this high.  Maybe it is a contrarian indicator.

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#4) On February 28, 2011 at 3:33 PM, L0RDZ (81.88) wrote:

Come on checklist ?  as long as they can speak properly wouldn't you prefer to look at someone  who at the very least doesn't turn your stomach, personally a lot of the women and men on cnbc could afford to look better and lose some weight thanks to the camera adding ten pounds.

Heck if they could get some younger hot people you could attract a lot more people to the financial news by having them occasionally flash a little  T & A  I know I would definitely be paying more attention.

Really do you want to hear an opinionated overweight over the hill graying no make-up woman ~ I mean they already have JIm Crammer ~ if they were to force him to wear a dress and a wig with make up everytime he's so wrong maybe just maybe he would do a better job, instead of constantly talking about his books and how back in the dinosaur age he supposedly did this or that ~ yet probably still lacks the financial ability to retire comfortably at his ripe old age.

 

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#5) On February 28, 2011 at 3:33 PM, checklist34 (99.72) wrote:

A chart I read...  let me see if I can find it. I think it was on seekingalpha.  Wall Street actually, per the chart, was selling into the bubble in 2008, handing the hot potato to someone or other.  Todays long position was ALOT higher than that one.  Contra indicator ... eventually, but I think theres a chance it self fulfills for a time.  

this may have been it, methinks:

http://seekingalpha.com/article/255206-speculative-fervor-for-crude-hits-fever-pitch-stay-cautiously-bearish

Huge speculative interest...  And while Wall Street seems to have played the 08 oil bubble really well, it appears they got caught in the downdraft in 2010 and their high interest acted... 

like a self fulfilling prophecy for a time and then a contra indicator. 

I am not going long oil here.  

Wow, looking again, that chart shows massive correlation of oil prices with net long "wall street" interest.  Still, its clearly the evils of fiat currency and "the bernanck" that are making oil go up, has nothing to do with runaway speculation...  

 

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#6) On February 28, 2011 at 3:34 PM, checklist34 (99.72) wrote:

lol, LORDZ.  Maybe i am the oddball out, but I just don't like my own horniness and work mixed.

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#7) On February 28, 2011 at 3:35 PM, Momentum21 (76.04) wrote:

Are you going to be like the SharePlanner and give your daily market strategies? : )

"the market is nosing over"

"the market is about to breakout"

"the market just formed a love candle"

If there is one thing for certain it can always go either way! Put the remote down Chet...  

 

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#8) On February 28, 2011 at 3:38 PM, L0RDZ (81.88) wrote:

Checklist you need to handle your business and than you won't care about how hott or not the person is, plus its an excellent stress relief as well.  So if your getting turned on too much by the people on CNBC you need to either call your wife, your girlfriend, the next door neighbor, and or some professional to help you out.

 ALSO FYI people please stop recommending on ALSTRY'S blogs. he constantly blogs the same old junk over and over again, luckily people have stopped commenting on his blogs.. thank god. but its a shame that he is the top blogger and top recommended when he doesn't provide squat in terms of investments, heck he doesn't even have any picks for me to rip on him about.

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#9) On February 28, 2011 at 3:42 PM, L0RDZ (81.88) wrote:

FYI the only decent woman on CNBC is the one from Australia and she's has her bad rough days, plus that one blonde who smiles a lot but she ~ how do I say ??? a little overweight ? but I like her smile, she can smile even when she isn't feeling it ? while I'm at it they have a pretty red head as well but come on all these women are fully capable and deserving of their jobs.

 So I think your the odd one out. :)

 

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#10) On February 28, 2011 at 3:48 PM, checklist34 (99.72) wrote:

LORDZ:

pretty girl stress relief:  calling your girlfriend and telling her come visit

pretty girl pointlessness:  opinionless commentators on CNBC with bad accents and no job other than to sit and smile.  I mean come on!  This is an academic excercise, a discipline, serious biz, its not sexy party time.  

hot girls with nothing to say on MTV:  sensible

hot girls with nothing to say on CNBC:  not needed

lol.  girls are well versed in smiling even when they aren't feeling it...

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#11) On February 28, 2011 at 3:49 PM, checklist34 (99.72) wrote:

momentum,

     I guess just thinking out loud.  Its a goal for me to one time catch a significant downdraft and make money on it.  I am starting to wonder if the whisper to a hum is key to this goal...

     Its also my goal to one day short sell a stock into oblivion.  

gotta have goals

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#12) On February 28, 2011 at 3:55 PM, L0RDZ (81.88) wrote:

Ultimate stress relief is when you can call multiple girlfriends and they don't mind sharing...

One can keep an eye on your stocks and blondes while your pre-occupied with the brunettes, the redheads, and the asian black haired girl.

LOL

 

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#13) On February 28, 2011 at 4:03 PM, checklist34 (99.72) wrote:

lol

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#14) On February 28, 2011 at 4:30 PM, Valyooo (99.54) wrote:

Checklist,

I agree on the hot chick thing...they sound like idiots half of the time.  Get off of cnbc and get in the kitchen, woman!

Just kidding, but you are right...the "eye candy" isn't even very good, and it has no place.  If they knew what they were talking about, that would be a whole other story.

Why not try shorting a broken etf into obvlivion with 1% of your portfolio just to get the feel for it?

And, also, I would like to add, don't try to short something you consider "over valued"...short something with a catalyst.

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#15) On February 28, 2011 at 4:38 PM, checklist34 (99.72) wrote:

momentum, also both this and my last post in between my rants at brainless bearishness...

... are to ensure that my rants don't lead anbyody to become wildly bullish at a time when I do not support wild bullishness.

 

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#16) On February 28, 2011 at 4:40 PM, checklist34 (99.72) wrote:

I am short a whole lot of broken ETFs and will not cover until actual oblivion with a whole, whole lot more than 1% of my portfolio...

From the looks of that oil chart and its behavior over the last couple of years we should see...

A)  oil stay high or go up as long as Wall Street keeps pumping money into it

B)  a significant correction once the trade comes off, momentum leaves, and the momo trader guys start selling rather than buying.

So the next big play is probably a bet on it going down, not up, but timing wouldn't be clear.

 

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#17) On February 28, 2011 at 4:44 PM, portefeuille (99.65) wrote:

Tomorrow might be a good day to sell a small part of your ATPG shares (maybe 10%) ...

US OKs first deepwater drilling permit after spill

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#18) On February 28, 2011 at 6:40 PM, Option1307 (29.96) wrote:

I am more than willing to wait for the correction I have been looking for, as I know exactly what I want to do into it...  I just don't think last week was the correction I was looking for.  

Care to elaborate without giving away your secrets? I certainly have a list of stocks I'd scoop up in any significant correction but am curious to see your thoughts.

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#19) On February 28, 2011 at 7:37 PM, L0RDZ (81.88) wrote:

If your not in love with the market but have a good portion long, come tommorrow if you have smart positions, you'll be absolutely in love when the market gaps up like I think going to happen...

 All I can say is more money more money... :)

run that change...

Also my Alstry blog is rocking....

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#20) On February 28, 2011 at 9:40 PM, monksnake (39.86) wrote:

I'm a little late to this part of the thread, but none of you think Erin Burnett is good looking?  She looks good when she hasn't had a long night out after a coke binge.

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#21) On February 28, 2011 at 11:46 PM, checklist34 (99.72) wrote:

option, I would love to talk about it, but I've found my blogs quoted in scamfomercials on the web a couple of times, and ... its the greatest conceptual strategy extant, I am convinced.  I just can't pony it up for all the world to see.  If there was a private CAPs forum I'd talk about it, perhaps.  

 

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#22) On February 28, 2011 at 11:47 PM, checklist34 (99.72) wrote:

monksnake, thats why midwestern girls are the hottes tin the country...

those west (and, sometimes, east, but mostly west) coast girls can look really good...  after full game prep and warmup.  But holy hannah strip away the glitz and you get, yes, a coked out mess with a big hangover sometimes.  

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