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The Greatest S&P 500 Is About To Collapse Blog In The Universe!!!!

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196

July 23, 2009 – Comments (66) | RELATED TICKERS: SPY

In honor of EverydayInvestor, GMX and others alike who have done posts about the greatest blog on Earth or in the world, I give to you the Greatest Blog about the impending S&P 500 collapse in the Universe!!!!!! Hide the women and kids, everything is about to come crashing down around you!!!! Fantastic Alstry impression right?

Anyhow, getting onto things, the S&P 500 is incredibly overextended right now, so much so that is has thrown every indicator I look at completely off the scale. If anything we have been shown that this rally has been caused by weakness in the dollar and short covering. I would propose that the majority of this rally has been nothing more than stop losses being hit by traders short the market.

Corporate earnings have not been anything spectacular and have done nothing more than to highlight the inadequacies of financial analysis. Most institutions estimates have been absolutely piss poor over the past six months, either shooting way too low, or far too high. Revenue figures from the majority of S&P 500 companies have been trickling in down 7%-29% and they've been falling short of many analyst expectations. All we have seen is continued job cuts, cost reductions and when in doubt, blame the dollar for everything. This is not real growth, its passing on the problems to the next person. I also want to know what happened to the time when corporate earnings were compared to the company's OWN guidance and to prior reports? I feel like I'm taking crazy pills here for a concept that has been thrown by the wayside.

Stock options are telling the entire tale here as the put to call ratio has become increasingly bearish over the past five trading sessions. I figured that the bearish would be predominantly confined to the August and September months, but you can look all the way out into December and there is still significantly more action on the put side than the call side. Traders are trying to tell you that they expect a greater probability of downward action that upside at this point and I don't think you can ignore so many open contracts. Let's remember that options are generally not traded by small time traders and are often tools used by trade professionals and institutions.

I also want to take this time to analyze the housing start figures that were reported today. What we saw was supposedly a third consecutive month of improvements. Now I definitely see improvement, but when you are selling 1/3rd of the amount of homes you were selling last year rather than 1/4, I'd hardly call that rounds for calling a bottom. Any improvement off those levels would be relatively simple, but with more than 33% of all homes being sold in July in foreclosure, there is hardly any pricing power out there. Let's face it, the majority of wealth in this country is created through real estate and we are clearly 3-5 years out before that begins to occur again. I don't have any figures of California or Florida in front of me with which to compare, but I think these are the states that need to be used when really gauging if we've turned the corner in the homebuilding market.

And now for a smattering of technical analysis from the following two charts:

As you can see from the first chart, the S&P 500 has run into a lower channel line from its original descent which it began nearly two years ago. Also of importance, note how the S&P 500 has reacted historically to an rsi of 69 or higher. In all cases we've seen a retracement of at least 8%. Let's remember here that history is typically our friend.

The second graph shows a close-up of the past six months. The interesting thing here is if we extrapolate out the lower channel line from the lows of the rally, we get an almost perfect head bump at 980. Thats two confirmed lines, one from above and one from below that should put a dead stop to this rally. When in doubt we have an overbought condition to confirm what the charts are already telling us! Admittedly this move has me completely confounded as it should have had at least one solid down day by now, but we all know markets don't go vertical so I remain dedicated to my SPY puts.

As an added bonus and the real reason why this is the greatest blog in the universe.... since I have become Top Fool through a mixture of a lot of luck and good timing, I will open up the idea of posting my email address or AOL Instant Messenger screen name (I'd have to gauge which one is more desirable to the community) so you can ask me whatever questions you like about stocks in general. Will I answer them all, don't quite know? Will I give you 100% correct advice, probably not. What I can tell you is I will grace you with the same sarcasm as I grace these boards. I don't however hand out access to my sarcasm for free; it comes with a price and I'm sorry binve, macaroni pictures won't cut it this time. Make this blog the most recommended blog on all of Motley Fool and I will at the communities request post either my email address or AOL screen name so you can get in contact with me beyond the Fool. So 215+ recommendations ought to do it! Consider this MF Extra Credit.

UltraLong

66 Comments – Post Your Own

#1) On July 23, 2009 at 10:12 PM, falang1 (96.65) wrote:

one rec for one wild guess on TBT....

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#2) On July 23, 2009 at 10:15 PM, AnAmateur (< 20) wrote:

I enjoy your posts - I'm not sure the flood that posting your aim or e-mail would bring.

However - I do have a question. When did you begin on the Motley Fool? I noticed you started 3/9 "the bottom". Were you a member before that? Either way, good call on the bottom on 3/9.

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#3) On July 23, 2009 at 10:42 PM, rexlove (99.36) wrote:

Congrats on getting #1. I knew GMX was a litttle delusional thinking he would get it and predicted you would make it to the #1 spot before he did. Even though your blogs have turned bearish - you're stock picks are still overwhemingly bullish and this helped you get there.

Like you, however - I think there has to be some sort of pullback at this point. I thought it would be today but good earnings from MMM, F and more changed things. Now it's looking like it'll be tomorrow now that we've got some negative earnings surprises from MSFT and AMZN. That should change market sentiment for a couple of days at least.

Got some money on the sidelines - looking to make some buys.

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#4) On July 23, 2009 at 10:55 PM, RootnToot (30.19) wrote:

All Glory to UltraLong! ;-)

Rec from me

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#5) On July 23, 2009 at 11:01 PM, JGus (28.90) wrote:

Ultralong - Congrats and I am in complete agreement regarding the end of this unbelievable run over the last week+.

rexlove - You obviously missed it (or you're very good at putting your foot in your mouth), but GMX did reach #1 before UltraLong did. Here's my post congratulating him on the accomplishment:

GMX is now TOP FOOL! Question is...when will he make his appearance?

July 08, 2009 – Comments (8) | RELATED TICKERS: GM , X , LUV

When he stated that he was taking a break from blogging on CAPS for a while, he also said that he wouldn't be back until he was TOP FOOL. Today, that has come to pass. I'm looking forward to his return and anxiously await his blog with all of the BULL-headed comments made to him over the last few months (not that GMX is immune to making rash comments of his own).

 

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#6) On July 23, 2009 at 11:05 PM, portefeuille (99.44) wrote:

A slightly different point of view.

 

The S&P 500 March 2009 rally (in green using spline interpolation) vs. the NASDAQ 100 January 1987 rally (and subsequent October 1987 crash).



enlarge

 

(some further explanation in this post)

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#7) On July 23, 2009 at 11:08 PM, binve (< 20) wrote:

UltraLong, Great post man! And congrats again on #1!

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#8) On July 24, 2009 at 12:25 AM, TMFUltraLong (99.96) wrote:

AnAmateur,

I'm pretty sure I signed up on March 7th because it took a good 2-3 days to get all those picks into the system and it was over a weekend that I did it.

UltraLong

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#9) On July 24, 2009 at 12:47 AM, Donnernv (< 20) wrote:

Or to translate:  I stepped into a steaming dogpile on March 9, and I'll never repeat it again.  I am one lucky Mother.  So, now, after my four months of magnificence, I'll offer you my insights on a one-to-one basis.

But remember, my insights are worth exactly what they cost.

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#10) On July 24, 2009 at 12:55 AM, awallejr (82.76) wrote:

Except, Porte, 1987 wasn't really a crash but a very sharp and short correction in an ongoing bull market.  The losses were made up and then passed within months.  Was a great buying opportunity.

As for the current market, I think we are passed "it is just a bear market rally"  argument. A 40 % increase over 5 months now is something quite different.

I do find it ironic that someone named "Ultralong" keeps posting these "We are going to crash day 150" type posts.  Was great timing on your part to create the account early March with the bulk of your gains as a result of bullish calls, or rather shorting shorts.

 

But as for your arguments, I honestly don't see how this latest rally had anything to do with short covering.  What evidence do you have?  I saw a market correct by around 8% followed by a gain of 12%. Short covering just doesn't make sense for that.

I know you've said elswhere that you question the latest round of earnings as basically being "hollow" because profits were more from cost covering than expansion.  But as I responded before, of course this would happen since that's what you do during recessions.  However, should the economy itself pick up then these companies stand to make much higher gains since you'd be coupling the cost cuts with eventual growth.

As for put/call ratios that doesn't dictate the ultimate direction but simply someone's "bet."

With housing, I am in the business so I do speak with some experience.  That will continue to drag economic growth.  While Jim Cramer made his ridiculous "hedge fund mentality"  bottom call on housing last month, it just doesn't work that way.  It remains a function of time since it will take time to run through the foreclosure inventory.  That will take several years more.

So while I would agree that we aren't in a booming market, I just don't see real justification for a retest of March's lows.  I was watching CNBC tonight (the show after Kudlow's) with the goofy looking guy.  There was a segment where his guests were asked to predict the DOW for 2010.  You had some calling for DOW 3800, DOW 4000.  One guy even made a bet it will hit 3800 (a bet I would have covered in a flash if I could).  Imagine, DOW 3800.  6500 was cheap as it was, at 3800 you'd literally be giving stocks away for way less than their liquidation value. 

Now the one issue very few people ever use as a justification for their pronostications, and to me it really should be THE issue, is GDP.  It was no coincidence that the market plunged as it did while 2 consecutive Quarters had -6 and -5 GDP. So to even try to argue a DOW crash back to even just the March lows, please make the argument of where you see future GDP and why. 

I think monday we will find out what the 2nd Q will be.  No one is predicting it as bad as last 2 quarters.  Great Britain just announced their most recent quarter at only -.30. 

Now you will probably see a correction after this latest run-up.  But another crash?  Need better GDP arguments for that please. 

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#11) On July 24, 2009 at 1:14 AM, portefeuille (99.44) wrote:

Except, Porte, 1987 wasn't really a crash but a very sharp and short correction in an ongoing bull market.  The losses were made up and then passed within months.  Was a great buying opportunity.

 



enlarge

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#12) On July 24, 2009 at 1:40 AM, awallejr (82.76) wrote:

ok the bulk of the losses ;p  Was awhile ago for me.

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#13) On July 24, 2009 at 2:00 AM, elgin74 (29.88) wrote:

couldn't the increased put buying you are seeing be a way of buying insurance to protect long positions and not necessarily new bearish position bets?

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#14) On July 24, 2009 at 2:03 AM, TMFUltraLong (99.96) wrote:

elgin74,

Absolutely it could, I just find that incredibly unlikely to be happening after a 7-12 day run-up.

UltraLong

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#15) On July 24, 2009 at 2:30 AM, awallejr (82.76) wrote:

Fine don't respond to the criticism.  I didn't think you would regarding the GDP question.

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#16) On July 24, 2009 at 2:52 AM, TMFUltraLong (99.96) wrote:

awallejr,

I've answered this question countless times. I'm not preaching new lows, but what I am looking for is a screaming sell off from this rally. I don't expect GDP numbers to be worse than -5% to -6%...I think (1.2-1.8%) would be more realistic given what we saw from the UK. I still feel that if we were to test the 808 area we would be more than ready to resume the rise, possibly as high as 1200 within 10-12 months after that. I'm just a believer that most every move needs a test unless its a particularly violent or extreme move. The move down to 666 was an extremely panicked situation and I dont feel stocks should ever have been that low. Likewise though, I don't think we can etch out a 10-12% rally without so much as an 8% correction from that at the least. Two steps forward, one step back.

Put to call ratios are "bets", but they are bets made predominantly by financial institutions, not Joe Schmoe. The people placing the bets and making these trades are large firms and they are dictating where we go next.

With regards to earnings, they ARE hollow. Revenues are dropping, there is no growth. You can only cost cut long enough to hide problems from the public. Growth will return, but you cant claim to be ahead of the curve or even on the curve until the curve turns. All i've seen is negative revenue growth. That is a continuing recession, not an end to a recession and the 10-12 day uptrend in the market here is unwarranted.

As for 1987... it took 4 years for you to pretty much be breakeven with the market and another year to overtake inflation.

So that is what... a 2nd post on we're going to crash the s&p? How close to day 150 am I? Apparently I wont be the only one to point out exaggerations in this thread. You don't have to like me (and I know you dont) but you will be damned sure I won't take that crap on my own thread =)

UltraLong (being a little less sarcastic and a little more to the point)

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#17) On July 24, 2009 at 2:58 AM, Tastylunch (29.52) wrote:

Hmmmm

congrats on being number #1 dude, you are on a really impresive run and your pitches have been stellar

kinda funny how hostile people have gotten to bearish calls again.

Also kinda funny how much the top players seem to care about recognition/respect from other players.

Well I gave you my +1 rec 

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#18) On July 24, 2009 at 3:08 AM, TMFUltraLong (99.96) wrote:

I don't think its so much recognition or respect, but they are put on a pedestal as being "in the top 10" and its in human nature to revel in the failure of others. I saw how much crap GMX, Everyday and even BullMarket took for being top fool, just comes with human nature.

UltraLong

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#19) On July 24, 2009 at 5:27 AM, Upstar75 (< 20) wrote:

Hello, Nice blog Long. I want to ask you what interval you think S&P will adjust back to.Would appreciate if you could give your opinion on the level.  Thanks.

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#20) On July 24, 2009 at 5:32 AM, TMFUltraLong (99.96) wrote:

I would like to see in a utopia world, an adjustment back to 808, but anything around the 840 level and a bounce would give me a longer-term buy signal. Right now, I won't give that buy signal, not on this rally.

UltraLong

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#21) On July 24, 2009 at 9:34 AM, bigpeach (31.45) wrote:

I was really hoping this wouldn't turn into a regular entry like the first unfortunate series. You made your point with the first one and everyone had a chance to respond. No need to beat a dead horse. These get very tiring.

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#22) On July 24, 2009 at 9:52 AM, awallejr (82.76) wrote:

I never said I didn't like you.  I have no feelings one way or the other.  Now GMX, he's another story, but that's because of his style of insulting those that disagreed with him or denigrating people with far greater credentials than himself. My reference to day "150" really was a comment regarding GMX's series which seems to be continued by yourself now.  For months  bears kept telling people the market will crash, the market will crash.  For those that listened actually lost a tremendous opportunity.  The thought of fear simply kept and keeps them held back.

And yeah we do seem to have similar discussions but I am simply responding in your new threads about the same things.

Your GDP argument doesn't make sense if you are calling for a "screaming selloff"  unless you define that "screaming selloff" at maybe 5-10%.  Personally I would call that just another correction to an uptrending market. Your tempered position, which is one I have preached as well here and elsewhere, doesn't seem to match the headline of this thread.

And while put ratios are from "professionals" they still represent a "bet" or as elgin74 mentioned, hedging.

As for the earnings, I really still must take you to task there.  We ARE in a recession.  Expecting current revenue growth would actually mean we aren't in one.  But what these earnings are telling you is that FUTURE earnings could be alot brighter should the economy itself turn positive.  You will then have cost cuts being supplemented by revenue growth.  And that is where GDP prognostication comes back into play.

It is really a simple matter, made complicated by opinions.

And look at Porte' chart again in comment 11. There was a sharp "correction" followed by a fairly steady upward pattern for years, with another short correction, followed by an even stronger upward pattern.  That's actually healthy.  Now 1929 was a different story.

And I wouldn't confuse people challenging your arguments as "giving you crap."  Believe me I know how to dish it out if I wanted.  But if your intention for these threads is to simply "preach" instead of open discussion then I know not to bother anymore.

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#23) On July 24, 2009 at 11:01 AM, BigFatBEAR (29.52) wrote:

Congrats again, Ultra!

I think you're going to be hard-pressed to reach the necessary 200+ recs here. :) Maybe if you leave this blog up for a while AND stay Top Fool for a while...

Anyway, I really appreciated your honesty here: "since I have become Top Fool through a mixture of a lot of luck and good timing"

And it was also cool to read about how you were making picks the whole weekend of March 7-8.

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#24) On July 24, 2009 at 11:13 AM, rexlove (99.36) wrote:

I think one big point that a lot of people miss in this discussion is that the market is forward looking. Yes - times are tough. Yes - there is high unemployment. Yes - revenue is down. That's why the market took the tumble that it did. We are coming out of a recession. Unemployment numbers are probably going to get worse before they get better. That's what happens when coming out of a recession. The market is thinking forward. It sees a recovery 6 months down the line. Profits, revenue and GDP growth will move to the positive direction.

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#25) On July 24, 2009 at 11:14 AM, rexlove (99.36) wrote:

I think one big point that a lot of people miss in this discussion is that the market is forward looking. Yes - times are tough. Yes - there is high unemployment. Yes - revenue is down. That's why the market took the tumble that it did. We are coming out of a recession. Unemployment numbers are probably going to get worse before they get better. That's what happens when coming out of a recession. The market is thinking forward. It sees a recovery 6 months down the line. Profits, revenue and GDP growth will move to the positive direction.

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#26) On July 24, 2009 at 11:16 AM, rexlove (99.36) wrote:

Jgus - I didn't see GMX reach the top spot. If he did it he certainly didnt close out the day with the top ranking.  

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#27) On July 24, 2009 at 11:26 AM, CoastalTrader (94.59) wrote:

You need some new indicators....the S&P 500 is still below where it was 8 months ago.  We will see some corrective action but there is still PLENTY of room to run.  S&P 500 will be between 1000 and 1100 by years end.

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#28) On July 24, 2009 at 12:37 PM, Mary953 (62.05) wrote:

Notice - Ultralong - You have a nomination pending for the MoFie's

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=233464&t=01007737217973478225

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#29) On July 24, 2009 at 12:49 PM, farmnut1985 (47.63) wrote:

Congrats Ultralong,

I have a question regarding the housing and real estate.  Is there not some seasonal cycling in the housing market similar to some of the commodity markets?

RPM 

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#30) On July 24, 2009 at 1:53 PM, jmt587 (99.89) wrote:

Ultra, thanks for your thoughts.  My one quibble is on the put:call ratio, and why you think this has any valuable prognosticating information.  Any option involves two parties, a buyer and a seller.  So, if there are a lot of people buying puts, there are just as many people out there selling them.  A simple ratio of puts to calls doesn't seem like it would be nearly as valuable as a look at the cost, and the change in cost over time, to buy a put.  Your thoughts?  Am I crazy?

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#31) On July 24, 2009 at 2:16 PM, alexreising (47.89) wrote:

There's some pretty substantial real economic data coming out next week and if it's weak, I think we give back at least half of the win streak.

 If the data confirms the bullish sentiment, I will need to reconsider my current views.

 But I doubt it's going to be very good news aside from maybe housing sales, which we all know doesn't mean much other than house prices are really low and interest rates are even lower. But the dumb ass talking heads of CNBC like Cramer, Kudlow and Kneale are going to spin it bullish, just like their overlords desire.

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#32) On July 24, 2009 at 2:32 PM, uclayoda87 (29.46) wrote:

Excellent post, reminds me of Binve, but shorter.

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#33) On July 24, 2009 at 4:42 PM, Quantemonics (99.45) wrote:

Ultralong : Welcome to the Top Fool club!

Has anyone done the math on corporate profitability in 2010-2011 given a (V) shape recovery in the economy and 5%-10% GDP growth next year?

I am estimating a monster jump in profitability for the average U.S. business after all the cost cutting and belt tightening of 2009.

(P.S. I would like to thank the idiot short sellers out there for truly enriching my life in 2009.  This was a once in a lifetime buying opportunity thanks to your animal fear, and downright absent minded greed.  I love all of you very much.)

My prediction is that U.S. income tax receipts will follow business profits through the roof next year, and we will see records in taxable income by 2011 for the U.S. economy.

What will stocks (businesses) be worth in 12-18 months when they are earning record profits from their business operations and interest rates remain relatively low with the large slack in industrial output and total capacity?????

The Asian economies are starting to hum again, and their stock markets are at or near multi-year highs now.  Betting on anything more than a seasonal 10% market correction from this level is quite insane, if you ask me.  The bull move in the global stock markets is just in the 3rd or 4th inning of a 9 inning game, and economic growth is just ending inning 1 or starting inning 2.

The only gripe I have with Ultralong is he claims to be both Ultralong and Ultrabear at the same time.  I have problems with people who try to have it both ways!  Be a man or not, so we can figure out your true character.

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#34) On July 24, 2009 at 4:53 PM, TMFUltraLong (99.96) wrote:

I'll say it again, Im not a bull 100% of the time, Im not a bear 100% of the time, but I'm a skeptic 100% of the time. I only chose the name UltraLong because of the nature of the picks I was about to enter on this site starting March 7th. I was actually astounded no one already had this name.

UltraLong

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#35) On July 24, 2009 at 4:54 PM, Bays (30.79) wrote:

(P.S. I would like to thank the idiot short sellers out there for truly enriching my life in 2009.  This was a once in a lifetime buying opportunity thanks to your animal fear, and downright absent minded greed.  I love all of you very much.)

 

Lol

 

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#36) On July 24, 2009 at 6:50 PM, erilis (< 20) wrote:

Recommended this post, good read, and congrats on becoming top fool :)

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#37) On July 24, 2009 at 6:54 PM, freeits (99.61) wrote:

Great to have a new leader on top of things here! I hope to be of accomplishement with in the stock market one day....... http://www.mikestratton.net

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#38) On July 24, 2009 at 7:05 PM, TMFBabo (100.00) wrote:

UltraLong said a while back that he's a short-term bear and long-term bull.  That seemingly hasn't changed.

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#39) On July 24, 2009 at 7:30 PM, BravoBevo (99.97) wrote:

+1 recommendation.

Congratulations, UltraLong, on your ascendancy to the top.

Before you put out private information, you might want to consider setting up a separate telephone number, post office box or email account in anticipation of the large amount of pranks, spam and Nigerian business proprosals that will soon be cluttering your inbox.

Blessings to you! 

 

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#40) On July 24, 2009 at 7:55 PM, GlugGlugGlug (< 20) wrote:

+1 rec.... hope we can cyber some time once i get your AIM

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#41) On July 24, 2009 at 9:11 PM, wax (97.65) wrote:

Interesting thoughts about the S&P. Are they yours?

The some total of your post was the S&P is overextended. So.

People from the Sudan can't swim from Montana to Maine.

I feel fairly confident that piece of information will factor into another of your posts of investing daring do.

Wax

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#42) On July 24, 2009 at 9:40 PM, Mark910 (< 20) wrote:

Your post rings hollow with your picks.  Look at your caps picks and you are ...oh yea..ultralong.  Don't know whether to ignore your posts and look at your picks..or ignore your picks and listen to your blog.   Hmm do as I say not as I do..but as you do got you to the top of caps...wow now I am realy confused.  Oh well Congratulations.

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#43) On July 24, 2009 at 10:44 PM, checklist34 (99.73) wrote:

Stocks are still well below historical mean valuations via many valuation metrics.  price/book, price/sales, price/ebitda are examples of those.  They are not cheap by price/dividend and price/earnings seems to be subject to much controversy. 

Also the market has not been up in 12 years, only the 2nd time since WW2 thats happened, stocks are 35%+ lower than their recent high (on the S&P),  still farther down than all but 2 corrections since WW2. 

Blah blah blah.  As someone once said in a thread of mine "perspective, people, perspective".

We have finally moved out, slightly (about 1 negative day out) of the ~850-950 range stocks have been in for 10 months excluding the panicky dip to the march bottom and bounce from it.  

If one looks longer than a few months, its a bit tough to call the current stock situation a "bubble" as Tim Melvin did at thestreet.com recently.  

We're still in the toilet.  

And the $$ who were out are eventually going to have to go back in, and that should continue to put a floor under the market until a move to the 1050-1200 range is made at which time i'm Audi 5000

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#44) On July 25, 2009 at 7:50 AM, yjulaidan (< 20) wrote:

Here is what I think is happenning and what will happen,

The market is oversold relative to pre collapse periods and it is now controlled by a one or 2 very powerful trading firms with tons of cash and they are basically playing with the market especially taking advantage of the low summer volume due to the absence of the mainstream investors.

This firm (could be Goldman Sachs!!) is manipulating the market to maximize their trading profits knowing that otherwise if they leave it alone, they will not make money from a normal dull slow growth. The economy though might show signs of recovery and bottoming, is still weak because of unemployment, credit crunch, foreclosures, slow home sales, accumilating consumer debt and low sentiment etc. and IT WILL take us time to overcome these!! even with stimulus. The market will see 1,000 to 1,100 in SP500, but certainly not that fast!! and a correction is needed after the rally from March lows so the cash flows can be allocated in the right market sectors lead by techs and the other more worthy market sectors after a wrong start in financials...

First they tested the market apetite for a rally when the earnings season started at begenning of July hoping earnings will push the market. At that time reported earnings, also were beating estimates, but the market didn't budge...it actually tanked. When they failed to get a response, they sold their positions planning to jump in again heavily in mid July taking advantage of the Goldman Sachs results which by the way was among the very few that reported REAL revenues along with Google....and that was pretty much the spark that blew the market....they injected billlions into the market to fake a bull rally which was followed by short term investors who didn't want to miss the rally....I think what kept the rally going is that in order to keep the momentum, they kept injecting billions in the market to maximize the rally hype and therefore their profits, which explains the 10 day all up surge that is highly unusual to the market and the WEAK breakthrough of the 950 level...and I think they will keep injecting billions into the market till end of July pushing the SP to 1,000- 1,050!!

But beware it is all a deception!! even though late comers will give some support to the high levels, bad news or at least more of the same good "not better" news will pull the market down!! GDP which is due July 31st is expected to be negative, Oil companies reporting next week will not beat estimates because of rising drilling costs, the new monthly unemployment number coming as we enter August will be a new high (remember companies reduced costs by laying off people), Housing starts will show more of slow improvement and the rest of the earnings season will be simply much more boring!! Although big drug companies might report good earnings, I think it will not be enough for the market hold its gains....and guess what our friends in the powerful trading firm will do....they will sell their positions followed by everybody else which will take the market back to 900 - 950 range if not much lower to 800-850....this pullback will pave the ground for them to enter the market again around Sep- Oct to push it to record highs (1,100 - 1,200) taking advantage of the better 3rd Q earnings and the first positive GDP, which will be accompanied heavily this time by the investment community. This is actually good as the more mainstream and institutional investors get in the market the more difficult it will become for few powerful trading firms to play around with the market!!

I think in 2010 investors will start piling in the markets and it will behave in a more normal way again....the only thing is that there is still the risk of inflation and more market corrections due to expected future commercial real estate problems... in addition to other surprises if the stimulus spent in 2009 didn't solve our problems.....California is still on the verge of bankruptcy you know!!

You see...in a missed up trading environment like this, we should expect everything...any unusual trends and surprises!! Fundamentals and technical analysis will help us in guessing the market direction and resistance levels up or down only to avoid sticking our necks out of the trading range!! I think these times demand trading in shorter periods and avoiding staying long on anything as volatility will be the name of the game

Love to hear your inputs on this....

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#45) On July 25, 2009 at 6:19 PM, rexlove (99.36) wrote:

I love conspiracy theorists like yjulaidan. It's people like this that think the US government ochestrated 911 and the Kennedy assasination.

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#46) On July 26, 2009 at 12:59 PM, kdakota630 (29.86) wrote:

A)  Congratulations.

B)  Nice quotes for your top leader thing... first South Park, then The Simpsons.

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#47) On July 26, 2009 at 4:01 PM, wado05 (< 20) wrote:

Congrats Ultralong. Getting off topic a bit with this but I was astounded the other day listening to a report that the economy is on the rebound because the "stimulas package" has taken effect.There reasoning listed the fact that millions of government workers jobs have been saved.Sounds very socialist to me! That is the reason there is a problem.Everyone cannot work for the government in a capitilist society.Saving the jobs of people that are producing very little does not seem to be a way of getting this economy going.We need to get our infrastructure spending back in line.All of the jobs that have been lost in the housing market(and like it or not construction is what drives our economy) could be replaced by work on our infrastructure.These are the people that are buying homes and cars.This to me seems to be a very quick way to stimulate our economy.China seems to know this why don't we? Seems to me China has become more capitilist as the U.S becomes more socialist.

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#48) On July 26, 2009 at 6:09 PM, ManchurianAnthro (< 20) wrote:

Recommended!

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#49) On July 27, 2009 at 10:48 AM, yjulaidan (< 20) wrote:

+1 so far supporting my points above....new home sales increased 11% in June vs. May the largest increase since Nov 2008....so what did the market do? Did the rally explode further?

 No....a small pop and a sell off because the lords of the market want a red day today...or possibly a red week!! and those who poured money on the news just lost some money!!

Any thoughts....

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#50) On July 27, 2009 at 12:38 PM, BoomerJ (< 20) wrote:

yjulaidan post #44:

http://tinyurl.com/lhnogw

Funny you should point that out, a couple of days before this article.  Sounds plausible to me.

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#51) On July 27, 2009 at 2:32 PM, intersub (37.62) wrote:

Congrats on your #1 spot Ultralong.

Now since you are so bearish you should be closing many of your long positions, especially the longs on the indexes (or shorts on the  short indexes.)   You aren't.  So what's up with that? 

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#52) On July 27, 2009 at 7:32 PM, Mark910 (< 20) wrote:

 intersub..I brought this up earlier...apparently he is playing us for fools.  When I hear an idea its good to cinsider the source, which in this case does not line up.  Guess its just his way of plying the game and putting blogs out there trying to head everybody in another direction. 

UltraLongif you are at all sincere on CAPS and not just laughing at us all, then at least give us an explanation.

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#53) On July 27, 2009 at 9:28 PM, awallejr (82.76) wrote:

Mark I wouldn't take his blogs seriously anymore.  Even Alstry has the decency to reply to people responding in his million threads.  It's best to play eslewhere.

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#54) On July 27, 2009 at 9:39 PM, costanostra (< 20) wrote:

The king is dead. Long live the king.

We Fools all bow to UltraLong!

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#55) On July 27, 2009 at 9:40 PM, noescaper (23.43) wrote:

Based upon the weekly chart of SPY, the 38.2% Fibonacci line is touched today, and the bullish candles' volume of this rally has been reducing, both indicating of a strong chance to reversal to the down side. As such, I am feel the same as UltraBull - strong bearish movement may occur any time soon (probably by end of this week). That is, I am strongly bearish at least for the short term of 1 - 3 weeks. I play mostly short terms, so the long term bulls shouldn't need to curse me as they always believe that short term shorts will help them get a better entry price. Let's have a win-win :-)

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#56) On July 27, 2009 at 11:04 PM, TMFUltraLong (99.96) wrote:

Mark910.... yeah, thats what Im doing, steering you all in the opposite direction because I just have millions of followers. I think I've made it clear that my CAPS portfolio will not be an accurate representation of my real life investments. CAPS is more of a long-term or idea experiment of picks I'm throwing out there. Why should I close out my shorts? Those shorts would need to rise 1000% in some cases for me to be down on them. If we have a stock market that will be up another 40-50% in 3-5 years then I'll tack on another 50 points on another 50 stocks.

Awallejr.... why bother writing on my blogs then anymore?

UltraLong

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#57) On July 28, 2009 at 12:36 AM, dexion10 (27.79) wrote:

MOOO AH AH AH AH -- i've rec'd this post and salute such a dastardly dour post!

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#58) On July 28, 2009 at 1:08 AM, awallejr (82.76) wrote:

Eh when I respond to a blog I keep it on follow until people stop responding to it after a couple days.  This way I can respond to those that respond to me. Courtesy and all.

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#59) On July 28, 2009 at 3:21 AM, TMFUltraLong (99.96) wrote:

I don't use the "follow" feature and most of the blogs on MF have multiple sub-threads within the blogs...its as if they practically run themselves. There is no way I could accurately or in a timely manner answer every single post on this site in regards to me.

UltraLong

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#60) On July 28, 2009 at 10:53 AM, targetphil (74.44) wrote:

Is today the day it begins to head south?

 Have been following you since starting to use caps. I really hope you are incorrect about market correction, but from what you have put out for this FOOL to read has been extremely helpful, informative and correct. Not sure of finer points of CAPS game (or of market), but congrats on #1 status.

 Also SCREW the nay sayers.

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#61) On July 28, 2009 at 12:04 PM, awallejr (82.76) wrote:

Well Ultra I would think you would at least use it on the threads you start anyway.  Afterall, as you said earlier, it's your own thread (shrugs).

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#62) On July 30, 2009 at 11:49 AM, yjulaidan (< 20) wrote:

Well....

 This market is absolutely insane!! and collapsing is nothing compared to what is going to happen to it!! 

The market is way ahead of itself in the recovery hopes and the lords of the market are still injecting billions into it....today's surge strictly happened in pre market hours (guess who's behind it!!) and caused by a silly lower than expected jobless claims which honestly says nothing!! Yes Honda and Toyota posted gains instead of losses, but Japanese car companies have always been stronger globally and they are not an indicator for US financial health so what's the good news behind that!!

The economy is in a very bad shape!! It will TIME to fix it!! WE WILL NOT GO BACK TO PRE LEHMAN LEVELS SO FAST AS THE IDIOTS IN CNBC PREACH!! This is not how economic recoveries work....

 As I'm writing these lines the indexes are in a NOSE DIVE!! So look for the big collapse soon....UltraLong I'm with you brother...this market will earn its collapse

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#63) On July 30, 2009 at 1:03 PM, madmoney151 (29.75) wrote:

Now i remember why i never trust a man who types in all caps

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#64) On July 30, 2009 at 3:45 PM, TMFBreakerJava (99.51) wrote:

Congratulations UltraLong.  I don't think we have a big crash ahead.  I just think the panic took stocks to unsustainably low levels and that we are returning to sensible prices as the panic recedes.  Anyway you got my rec and I'm adding you to my favorite fools list to boot.

 Keep up the good work.  Long may you reign  (Until I get close, that is :)    

 Java

RB Home Fool 

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#65) On October 06, 2009 at 9:51 PM, APJ4RealHoldings (29.57) wrote:

Per your wish, rec'd.

Rec'd rightfully so.  Good post. 

And I find it amusing you beleive the majority of top 20 caps players will continue beating the market.  Thank you for sharing your thoughts.  You may be entirely correct, but I just can't find it within myself to be that optimistic.  If you are correct, CAPs will be a very valuable tool indeed for all investors. 

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#66) On June 26, 2010 at 1:58 PM, et2bru (< 20) wrote:

Economic Recovery Failure Denialism (ERFD) ERFD is a bankster term that is defined as a top-down syndrome of denial of any negative economic projections regardless of the data or source, and is accompanied by total disregard for the consequence of such denial.
Like most all of their top-led syndromes, the bankster's motive is to make money from those that are gullible (the foolish sheeple).
Some fools say that the next round of further enrichment of the overly wealthy will be achieved by shorting the overbought market (which was overbought using leverage instruments with the sheeple’s future tax money) so as to collect profit (and cheap stock) from the foolish sheeple.
No one said that foolish life is fair, and I for me think they were most certainly correct not to say so.

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