Thanks for bringing up margin debt to my attention.
I agree on breadth. Already, we see less and less stocks participating in move ups. However, after powerful upmoves breadth and price can diverge for a while, check out the Jan2012-Apr2012 rally.
Nevertheless, I don't think this is a market where the best strategy is to simply buy and hold which it has been since the November lows.
I'm not claiming to be an expert. And even the "experts" are wrong often. I could certainly be wrong as there are so many unknowns. I'm just describing the opportunity that I see based on my analysis and my interpretation of market conditions. I've given a stop loss to limit downside if I am wrong.
I am much less bullish here than I was in November.
I think that this article is from more of a short term, trader perspective. Like I said, I would be out if we break last week's low on this trade.
Thanks for your thoughtful comment. I do agree that there are some serious problems that have not been dealt with as they were in previous bear markets but just have been papered over with massive liquidity. I do think they will rear their heads in the future but I think we disagree on the timeframe.
I also mentioned stop losses in my article to manage risk especially because I'm aware that there are lots of uncertainties and that I have been wrong in the past and will be in the future.
Well, I wasn't trying to say this is the time to go "all in" on stocks. I just see a short term trade based on some accumulation in the market despite a week of bad news. If the market falls below last week's lows, then I would get out.
I have written previously that I don't think this is a secular bull market which seems to be a growing consensus as the price starts affecting psychology. So, I think we have some common ground.
And I do understand that surviving and experiencing numerous market cycles is necessary to have any real credibility, so I hope to emulate your success.
Historically, buying the indexes is not a great proposition for long term when volatility is this low. At the same time, going short when volatility is this low can be dangerous because it can stay low for extended periods.
I think the title implies that is what I am saying. What would have been more accurate but not possible would be to say - Since November in this uptrend, the debt ceiling, the sequester, fiscal cliff, Italian elections have not mattered and only served as buying opportunities whether due to Fed liquidity or strong demand or rotation from bonds into stocks. I think that Cyprus will be the same.
Of course, I could be wrong and have been many times in the past so I recommend a stop loss since this is a short term trade.
I guess, I did not do a good job in my article explaining my point. I think there is an opportunity for a short term trade to get long with a stop at the lows of last week when the Cyprus news first hit the wires around 1530 on the ES.
I don't think this is the time to go all in on stocks especially for long term trades as I think at some point in the future there will be a time with more fear and better valuations to get long. Part of this is because I don't think this is a secular bull market for stocks which I wrote about here - http://seekingalpha.co...
I do think because of the unprecedented amounts of liquidity deployed by central banks all over the world and the lack of inflation, this current bull market could go longer making nominal new highs, although I do think the easy money has been made.
S&P 500: Why You Should Take Some Profits [View article]
These are valid points.
My recommendation for a stop loss was for more active traders initiating positions frequently. Since late November, the best strategy has been to buy something and sit on your hands. I think that is going to change.
S&P 500: Why You Should Take Some Profits [View article]
I am not advocating front running the market. I think that is basically like betting on flipping a coin.
However, I think that these indicators are pointing to a more difficult trading environment. Already this is somewhat realized as less sectors are participating in this recent move higher. Therefore, I think we should be less greedy and more fearful at these levels.
S&P 500: Why You Should Take Some Profits [View article]
I apologize for that.
For trading, I think one can consider shorts and for long positions, more conservative profit targets would be appropriate as these indicators are pointing to a more challenging/choppy environment.
For investing, remain patient and wait for better entry points, more fear in the market.
How To Take Advantage Of This Stock Market Dip [View article]
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I agree on breadth. Already, we see less and less stocks participating in move ups. However, after powerful upmoves breadth and price can diverge for a while, check out the Jan2012-Apr2012 rally.
Nevertheless, I don't think this is a market where the best strategy is to simply buy and hold which it has been since the November lows.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I think that this article is from more of a short term, trader perspective. Like I said, I would be out if we break last week's low on this trade.
Thanks for your thoughtful comment. I do agree that there are some serious problems that have not been dealt with as they were in previous bear markets but just have been papered over with massive liquidity. I do think they will rear their heads in the future but I think we disagree on the timeframe.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I also mentioned stop losses in my article to manage risk especially because I'm aware that there are lots of uncertainties and that I have been wrong in the past and will be in the future.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I have written previously that I don't think this is a secular bull market which seems to be a growing consensus as the price starts affecting psychology. So, I think we have some common ground.
And I do understand that surviving and experiencing numerous market cycles is necessary to have any real credibility, so I hope to emulate your success.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
Historically, buying the indexes is not a great proposition for long term when volatility is this low. At the same time, going short when volatility is this low can be dangerous because it can stay low for extended periods.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I think the title implies that is what I am saying. What would have been more accurate but not possible would be to say - Since November in this uptrend, the debt ceiling, the sequester, fiscal cliff, Italian elections have not mattered and only served as buying opportunities whether due to Fed liquidity or strong demand or rotation from bonds into stocks. I think that Cyprus will be the same.
Of course, I could be wrong and have been many times in the past so I recommend a stop loss since this is a short term trade.
Ignore Cyprus: Stock Market All-Time Highs Imminent [View article]
I don't think this is the time to go all in on stocks especially for long term trades as I think at some point in the future there will be a time with more fear and better valuations to get long. Part of this is because I don't think this is a secular bull market for stocks which I wrote about here - http://seekingalpha.co...
I do think because of the unprecedented amounts of liquidity deployed by central banks all over the world and the lack of inflation, this current bull market could go longer making nominal new highs, although I do think the easy money has been made.
S&P 500: Why You Should Take Some Profits [View article]
My recommendation for a stop loss was for more active traders initiating positions frequently. Since late November, the best strategy has been to buy something and sit on your hands. I think that is going to change.
S&P 500: Why You Should Take Some Profits [View article]
However, I think that these indicators are pointing to a more difficult trading environment. Already this is somewhat realized as less sectors are participating in this recent move higher. Therefore, I think we should be less greedy and more fearful at these levels.
S&P 500: Why You Should Take Some Profits [View article]
For trading, I think one can consider shorts and for long positions, more conservative profit targets would be appropriate as these indicators are pointing to a more challenging/choppy environment.
For investing, remain patient and wait for better entry points, more fear in the market.
S&P 500: Why You Should Take Some Profits [View article]