After 5+ years of an amazing bull market, with stocks soaring to record highs, this weeks action, from a technical perspective, could be marking the top. As 2014 progressed we've seen many bears, after miraculously navigating the biggest bull market of our lifetime, throwing in the towel. That in itself should raise the eye brows of market participants.
We have chronicled the move of Priceline.com(PCLN) over the past few months. We have been one of the few public Bulls on this stock. While everyone was calling for a sell-off, we were buying calls. You can read some of them (here).
We noted on Monday how the past two week sell-off was a much needed enema. All the momentum stocks were taken to the woodshed... PCLN included. This market is not for the normal retail trader, as this would be the person who thinks Priceline.com(PCLN) is overbought, and is set for a massive sell-off(which folks have been clamoring for since $400). Right now is the time for the trader with the steel balls, unfazed by the volatility, to grab calls on Priceline.com(PCLN).
As we write this, the stock is trading at $728. We fully expect a break of $750+ this week, as the upside resistance has been removed(thats right you chickens).
As Yogi Berra would day, "It's DeJaVu all over again!"
Ever wonder how Houdini escapes from sure death? How Hulk Hogan wins the WWF championship? How Janet Jackson's nipple falls out of her bra during the superbowl?
The outcome is fixed. There aren't many certain things in life, and many people would say the only two things you can count on are death and taxes. I beg to differ. Death...Taxes... and a manipulated stock market.
Take tomorrow's over-hyped employment numbers. Do you think the numbers will actually have an impact one way or the other? If you say yes, then how?
So the numbers come in above expectations. What happens? The market will rally on the continued improvement in the U.S. economy.
The numbers come in below expectations. What happens? The market will rally(after a quick drop) because folks will buy on the hope of renewed interest in QE3.
Heads I win(bulls), Tails you lose(bears).
It's only when the last penny is in the hands of the Bears, that we will get any serious downside to this market. Will it be the summer? Maybe the fall during the elections? Who knows, but you have to trade what you see, and right now it's a market hell bent on making new highs.