Tag Archives: spy

July 5th Watchlist

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Hope everyone had a great holiday – now back onto business. Yesterday was the 4th of July today is National Intervention day. UK announced another round of QE as expected. Last vote was 5-4 against, but now UK needed to take action.

 

China reduced it’s lending and deposit rates again, the 2nd time in a month.

And finally the ECB lowered its rates to a record low of .75%.

LIke i keep saying, $SPY should be over $145 by now based on the US numbers, so this added intervention will help fuel the summer rally.

Buy the dips here IMHO -

More of the same for today on the watchlist as growth stocks will lead this charge IMHO ~

PCLN, LNKD, ISRG all look good.

AAPL breakin $600 PM here, maybe looking for $620 very quickly so $610 calls could be a nice flip.

SHLD – still on this one this week. Have $65s, 62.50s maybe a nice lotto @ .31 as this POS will start to get some legs here.

Earnings season next week, so will have some plays to grab before the weekend for the hype ~

Lets have another great trading day and remember, dont fight the tape!

- jimmy

Shake n Bake

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I have written countless times about the intervention in this market. How a retail trader can become brainwashed by the headline news, only to be blindsided by the 2-3%+ market squeeze ignited from some more can kicking by the powers that be.

One only need to look back to November 2011, to see the last time a floor was put into equities via the World Central Banks. This time it was Europe backstopping banks and it's countries serious debt issues. You see anyone talking about Spanish 10-year bond yields anymore and Spain's unsustainable debt level? Any more rumors of financial ruin for the eurozone?

The summer should provide for some quiet trading and a melt to the upside. There was some doubts to that thought 2 weeks back, when the market volume was telling of a possible break to the downside, but we remained bullish above the $SPY 127.90 level. 

Hope folks enjoyed the 'SHAKE", now it's time to "BAKE"

Happy Trading!

The Waterfall

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How does that saying go? When it smells like shit, looks like shit, tastes like shit, and came out of an a^^hole... it probably is shit... right? Well yeah. So lets apply those adjectives to the world economy: little to no growth in developed economies, huge debt issues in europe, a slowing china economy, a U.S. fiscal cliff, along with political unrest and change in some of the emerging countries. The world economy sure as hell looks like shit and would probably would smell like shit if DEBT had an odor.

Amongst all the macro economic conditions, the markets has rallied off their lows from October of 2011. Has anything really changed since then? Well yes. What changed is that we learned the world Central Banks will continue to throw band-aids onto the wounds - tricks they learned from the 2008 crisis. While retail traders are fixated on the doom and gloom headlines on CNBC, big money is bidding up stocks, knowing they have a security blanket and a friend waiting to pick them up when they fall down.

If you have read this blog or followed this site for the last few months, you have seen I am a bear at heart, but short term bull. It comes from years of fighting the same thing folks are fighting now. Fighting a tape thats rigged, knowing there is some red button that gets pushed in some office at 3:30pm to protect the markets. Now with the advent of the high frequency traders, you have even more reason to be wary. You have computers trading anything but the fundamentals of the market. It is hard work being a bear, and quite honestly, you can feel a bit evil being one. It sometimes makes me feel like Jack Nicholson in  batman.

But here it is June 25th, 2012, and I think my market sentiment has started to change. Usually making money in the market comes from going against the grain. Buying when folks are selling, and selling when folks are buying. Puts now? Sell? Go short? Isn't that what everyone is saying? In a way, yes. But timing is where folks get things wrong. I was talking about SPY $127.75-127.90 as my line in the sand. We break that and I am full on BEAR... buy the ammo, get the canned goods, and run to a bomb shelter. Well not that serious, but enough to get me concerned.

Last thursdays action was the turning point for me. It looked like folks were 'UNLOADING" shares as opposed to "SELLING" shares. Of course we had our ramp up on friday on light volume, but it was not with conviction. Monday's action confirmed my fears. Looks like we will have some type of waterfall sell-off to $120-$122 in the SPY in the coming week or two. Again, if we hold SPY $127.75-$127-90, then we should be ok. But my gut says we have some acceleration of the selling we have seen, and the market will tumble.

Stay tuned for more analysis, and check out our watchlist before the open. Updated SPY chart below...

 

How to Trade the Greek Vote Part 2 (Gold and Above)

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By 5pm Sunday when the Forex markets open, we should be able to assess the damage Greece has unleashed upon the financial world. World economic Armageddon is coming... Haven't you read the papers or watched the news? The Greek vote is being compared to the most dire financial events in history. A win by the leftist party Syriza will ignite panic in equity markets on Monday. Who in their right mind would be buying stock into the weekend? You might as well take your money to the roulette table... right?

Take a look at these headlines from the weekend so far:

 

 

 

 

 

 

 

 

Phrases like "euro zone's future could hang in the balance" and "Europe preparing for" a Lehman moment are some stark statements. Statements that should strike fear into investors. The folks who have seen what can  happen to a 401k in a few short months like 2008. The ones who have seen the "Flash Crash" of 2010. They are smarter this time around. Looks like they have been preparing for this weekend for a while as U.S-stock funds saw their 13th consecutive month of Mutual Fund outflows.

So with all the negative headlines and sentiment, why was the market up again for a 2nd straight week knowing these crucial elections were coming? With U.S. treasuries garnering all-time demand with all-time low returns as well as other safe haven asset classes, where are folks able to get a return on their investment that beats inflation? It's almost as if folks are being forced into equities. Now you also have continued threats of central bank intervention. You only have to go back to late last year to see what that did for equities.

I keep saying it, but we are in a head you win tails i lose environment. The Greece election will be a relief regardless of who wins. The market spoke on Thursday and Friday. Retail investors were the ones going short or exiting the market before the weekend. The big money was buying stocks into the close, with huge buy imbalances at the end of the day. Risk currencies were also up all day, especially in the morning. When the $4 trillion currency market is speaking, sometimes you need to listen.

My guess is a 1-2% gap up on the markets going into monday. Another week or two, and we will be over the 4 year highs. But what do I know? Time will tell...