Seeking Alpha
View as an RSS Feed

Pendulum  

View Pendulum's Comments BY TICKER:
Latest  |  Highest rated
  • Market Update: 'Risk Off' Indicators Retreating; S&P 500 Holding The Line [View article]
    Crankyguy - Thank you for your comments. Regarding Europe, it seemed every time the EU came up with some partial solution to the crisis last year and kicked the can down the road, the market managed to rally. There may be a rally off of the Spain bailout news, until investors focus again on the lingering problems in Europe. However, the "bailout rally" may have started last week, so it will be interesting to see if it continues on Monday.
    Jun 10, 2012. 10:49 AM | 1 Like Like |Link to Comment
  • Market Update: 'Risk Off' Indicators Retreating; S&P 500 Holding The Line [View article]
    Rich W - It is an interesting point about the shorts covering before the weekend. The Spain bailout was anticipated for a while, so some of the "bailout rally" may have been captured last week, especially the short covering part. We noticed some big moves in some of the more risky stocks we follow, which could be an indication of short covering.

    Regarding the global slowdown, we agree that the US, China and Europe seem weaker than previously expected. However, the US and China are still growing (not sure about Europe), and the question is whether the lower expectations are already priced in at this point.
    Jun 10, 2012. 10:45 AM | Likes Like |Link to Comment
  • Market Update: 'Risk Off' Indicators Retreating; S&P 500 Holding The Line [View article]
    Rich W - Thank you for your comments. Regarding Wal-Mart, we have a stop in place to protect against the downside. As WMT has been rising we have been raising the level of the stop. We see a scenario where WMT tests its all time highs and then retreats and another scenario where WMT breaks through the highs and continues upward with the strong momentum. Over the last decade, WMT's financial profile has improved and the multiple has contracted, which has been positioning WMT to breakout of this range. We are not sure if it will come in the short term, but it seems likely at some point.
    Jun 10, 2012. 10:38 AM | Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    jmoreton - Thanks. We mentioned the short positions in our core portfolio in the "StockTalks" stream. On Friday, we initiated shorts in RS, JOY and TIF. These positions are relatively small with tight stops. Prior to Friday we also had short positions in CRM and PCLN, which have worked out well so far and we still hold them. In addition, we have a position in SH. We may trade these positions at any time and we will cut our losses if they move against us. We are looking at other short opportunities that we may initiate on weakness this week.
    Jun 3, 2012. 10:49 PM | Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    Sirin - Thank you for your comments. We started posting weekly market updates on Seeking Alpha a few weeks ago and plan on adding new updates every Sunday morning.
    Jun 3, 2012. 05:35 PM | 1 Like Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    Gapwedge - Thanks. We think that having a large cash position in times of market turbulence is a great strategy that more investors should adopt. Large institutions, mutual funds, etc., can't have large cash positions, but small investors can and it is a great tool. We had a lot of cash going into Friday, which served us well. Good luck over the summer.
    Jun 3, 2012. 10:28 AM | 2 Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    Jon - Thanks. We were not aware of OFF, but will check it out. At first glance, it seems that OFF is an ETN, not an ETF, and has a market cap of $16 million, according to SA. This makes us cautious on trading it, but it may be interesting to follow.
    Jun 3, 2012. 10:22 AM | Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    CautiousInvestor - Thank you for your comment. We agree that the biggest risk on the short side is the potential for action by the EU or the Fed, which can turn around the market very quickly. But, we don't expect any action from the EU or Fed, if they decide to act, until later in June, so it will be interesting to see the market action until then.
    Jun 3, 2012. 10:18 AM | 2 Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    Robert -

    Good question, we are debating that issue as well.

    Before we make predictions about the 1,250 level, we want to see how the market acts this week and if there is downward confirmation to last week's move. We are not sure where the downward momentum will take the market, but think that a lot depends on whether or not we get a "crisis event." Last summer we had a crisis event, namely the downgrade of the US credit rating, which was a game changer for the market. We haven't yet had such an event this year and it is important to keep in mind the distinction between this year and last year. The market has been declining on fears of a crisis event in Europe or a slowdown in the US, but Europe may patch up its problems and the US is still increasing jobs, even if it is at a slower pace. Also, at some point, investors may decide that all the fears are already priced into stocks and the market may reverse course. We think that valuations are reasonable (or maybe even cheap), so there should be demand for stocks, if no crisis happens. Also, the Fed or EU could change the market momentum at any time.

    To answer your question, we are not yet sure at what point we will turn around and increase our longs. Part of the answer depends on whether or not a crisis event pulls the market lower or if it continues to decline on the current fears. We are small investors that can go from long to short very quickly, so we do not try to make predictions too far into the future. We prefer to see where the the market is going and align our exposure accordingly. Also, we think that when the market ends its decline it will probably trade flat for a period before going back up (if the optimistic scenario plays out), so there will be time to go long when we see a more favorable market.
    Jun 3, 2012. 10:15 AM | 6 Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    maverta - Thank you for your comment
    Jun 3, 2012. 09:56 AM | Likes Like |Link to Comment
  • Market Update: Analyzing 'Risk On / Risk Off' Indicators After The S&P 500 Rebound [View article]
    Sharp declines following the weak jobs report. The Dow (DIA) is especially weak. Yesterday, we sold some of our DCIX position and added a short in PCLN. We plan to continue to reduce our long exposure and increase our short exposure. It will be interesting to see how the market trades today - will it rebound a bit or close on the lows? It is important to see if the close today takes out the May 18, Facebook IPO, lows. Things look bad and we are probably headed lower and will need some violent low before things can turn around. But at any point the ECB or the Fed could come up with something to rescue the market, so caution is warranted.
    Jun 1, 2012. 10:11 AM | Likes Like |Link to Comment
  • Market Update: Analyzing 'Risk On / Risk Off' Indicators After The S&P 500 Rebound [View article]
    aq5021 -

    Agreed. We think that the Fiscal Cliff and the budget debates set for later this year are major risks for the market. Despite the WSJ article a few weeks ago, these issues seem to be overlooked for now. Maybe the market will focus on this as we get closer to the 1 year anniversary of the US rating downgrade or when the political rhetoric picks up as part of the presidential election campaign. In addition to the fiscal side, the Federal Reserve could also have an impact on markets when Operation Twist expires.
    May 28, 2012. 08:15 PM | Likes Like |Link to Comment
  • Market Update: Analyzing 'Risk On / Risk Off' Indicators After The S&P 500 Rebound [View article]
    Thanks for your comment. Our investing strategy is mostly based on fundamental analysis of companies and securities from a bottom-up perspective. However, we have found that it is helpful to look at the macro environment and other markets to get more perspective. In this article we call it risk on / risk off, but the important thing to focus on is how certain sectors and markets can impact the securities that we are analyzing and investing in. In general, there have been times over the last few years when macro concerns dominated the market. During those times it was better to stand on the sidelines, even if certain securities looked cheap, because the overall trend was down. We do not seek to time the market precisely, but we want to look for good entry points into the market and specific securities. For instance, if European sovereign debt and bank problems cause a major sell-off, then we would want to avoid increasing our long exposure until things calm down. If this materializes, then cheap stocks will likely get cheaper and we will want to get into them at the lower levels.
    May 28, 2012. 11:55 AM | 1 Like Like |Link to Comment
  • Market Update: S&P 500 Trading Range Breakdown And Key 'Risk Off' Indicators [View article]
    It is interesting that the Russell 2000 started to stall around February, which was earlier than the SPY. It was an indication that smaller companies were not continuing the uptrend of the larger ones, which was not a good sign.
    May 21, 2012. 02:32 AM | Likes Like |Link to Comment
  • Market Update: S&P 500 Trading Range Breakdown And Key 'Risk Off' Indicators [View article]
    We think that there are other long-term macro drivers for the market, including the improving US economy (even it is at a slow pace), many strong companies with good balance sheets, declining unemployment and some areas of the market with low valuations. Still the Fed could be the most immediate driver of the market to the upside over the next few weeks/months, if it comes out with another round of QE.
    May 20, 2012. 10:09 AM | 1 Like Like |Link to Comment
COMMENTS STATS
541 Comments
122 Likes