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If the NAAIM Survey of Manager Sentiment was "off the charts" bullish in the high 80s, what is...
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Friday, February 1, 10:52 AM ETIf the NAAIM Survey of Manager Sentiment was "off the charts" bullish in the high 80s, what is it now? The index rises to the unheard of level of 104.25, meaning the average respondent is now leveraged long. The most bearish manager is 60% net long - the most bullish position for the most bearish respondent ever.
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Or is it that you know very well that the market is not about to dip, hence you won't short?
Did you cover Amazon?
I'd hazzard you're 25 or younger and don't really have much direct experience with the Street.
When QE stops I will be long 3x leveraged inverse ETFs.
10% in cash should I need some emergency money for real life.
10% more in cash but I trade options with it. That's my fun money.
If you can predict market tops, then you must be that one monkey who produced a Shakespearean play when given a typewriter. I am just an ordinary monkey. I can predict nothing, except that 99.99%+ of people trying to predict market tops and bottom usually fail. So I am always late, I never catch the bottom nor the top.
But that also means I am rarely wrong.
The media's response is the most alarming. You'd think we have hit escape velocity and are now entering the most exuberant growth phase in U.S. history. It will be quite shocking for so many when this doesn't come to pass but is actually the opposite outcome.
Panic. Shock. Anger.
The loss of confidence in QE will lead these markets to selloff steeply and quickly.
what is long time?
Exactly!
The sooner investors realize this the better. Do not fight the Fed. You will get crushed, as well you should.
"But the question is when and what will be the catalyst?"
It's very simple. QEternity stops and the Feds start to raise rates. It's really that simple guys. That's when you short the market and make out like bandits both on the way up and the way down.
Whenever I try to anticipate (what do I know really, given all the high-powered HFTs and big-wig hedge fund poker players & big boys...) I lost money or the opportunity to make money.
I would try to stick with the crowd & main trend rather than guessing the minor dips here and there to time... My 2 cents
Pressing your bet at the crap table as the shooter makes one point after another can seem a very rewarding proposition for a while but when that inevitable 7 rolls the stick man sweeps all the money off the table and into his stack and it happens in an instant.
Same with this market - it is manipulated. It isn't a bubble so much as an attempt to corner the market and no attempt to corner a market has ever succeeded in the end. What happens when no one and I mean no one wants to buy what you have to sell. That day is coming at some point and getting stuck long is not going to be a good thing.
JS
However, it does seem the Masters of the Stock Market Universe are preventing a move above S&P 1510 for now.
My longer term target is still 1615 but unless we get a strong move above 1510 I think a pullback is at hand.
With where the S&P 500 p/e ratio, Shiller p/e ratio, etc. are right now, I'd rather preserve capital and miss out on whatever market increase may be to come...and SWAN (sleep well at night) ;)
P.S. I made money shorting the Russell this past week, so it can be done. Those who can't trade, put all your money in and go off to "safely graze." We'll take care of it for you.
Perhaps you get commissions from ProShares, BlackRock or Direxion to pump these creatures to retail investors. I'm not your audience.
We seem to be in agreement of late. This is not at all healthy. Stock prices should reflect the real economy. This is not supposed to be a casino game but that is what it has been turned into.
JS
Why treat investing as a morality game? It is anything but.
This is reflected both in the margin debt statistics and historically (as you might have guessed, periods where the central bank decides to print willy-nilly are followed by an attempt by many to lever themselves up, hoping that the leverage will be inflated away at the same time the assets they buy are also inflated).
That doesn't mean one has to defend these circumstances. This will end up having consequences at some point - money and trade are the very foundations of our society. Degrading those foundations might have unpredictable consequences, on a par with what happened to the communists.
When the bubble collapses - and ALL bubbles collapse - THEN AND ONLY THEN go short. Bubbles are wonderful things, you make money on the way up AND on the way down. Why short on the way up and go long on the way down just to feel that you are smarter than the rest. Hasn't Apple and Amazon taught you anything?
MI, again, you have too many certainties. You haven't been long in these markets for sure. You haven't seen enough yet. Were you already trading during 2007/2008? (that's STILL quite recent, just asking).
How long have YOU been trading?
You don't sound like you trade since 1995...
Anyone who still invests based on FA after the manic 90s learned nothing from the 90s.
How long have you been short AMZN Paulo? I think you simply refuse to learn from your experiences. You seem like a very idealistic kid to me. You are sure you have been trading for this long? Where's the cynicism?
Nothing wrong with being an idealistic kid, incidentally. The world needs more folks who are not cynical like me.
If all goes right, that will end up producing return for me, so no worries there.
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I am not complaining of market manipulation - I am simply stating as a fact that the market is being openly manipulated by the Fed, who is buying assets with the stated intent to inflate the market, to induce the wealth effect.
1) The Fed always manages the market. Openly.
2) People love to take credit when they are right, but raise the issue of the Fed when they are wrong, and that's exactly what complaining about market manipulation is all about.
What the Fed managed before, short term interest rates, although it influenced the stock market, didn't do so as directly and mechanically.
Like I said, you haven't seemed to learn much. I really doubt how long you have been trading.
If the Fed was buying short term money market loans, it would have almost no effect on the overall risk markets. If the Fed was buying shares directly it would have a monstrous effect. Since the Fed is buying MBS and long-dated treasury bonds, it has an intermediate effect.
If you are not adjusting to the change in Fed behavior which by the way is public, then you have not learned anything from your claimed experience.
Let's say the Fed starts to buy shares directly tmrw and announces that. Will you still short shares then? If think you will - you will run your FA models and complain about manipulation as you lose money shorting.
That's my point. I learned from my experience. You either didn't learn from your experience, or you do not have the experience that you claim to have.
I learned this pretty fast. I guess that's the difference between you and me, and why we clash so much on investing philosophies.
I think when this market does turn and go south the drops will be brutal and so rapid that.those on margin will be slaughtered... that stops will not be honoured as the markets will simply drop way below many people`s stops before the trades can be processed\executed. That is the danger.
I have no idea how long this can keep going up - perhaps Bernanke's ego has the DOW all time top of 14.165 in his sights. The US fiscal cliff has been conveniently forgotten - will it return.
At this rate of climb we could see 15,000 on the DOW by May - is that a healthy market? Is it manipulated? Yes, IMPO it is manipulated and that means they can crash it when they like... but why would they?
Dude; I think when this thing turns; you and the crowd that thinks like you will get hammered. If and when it turns; there will be no buyers on the way down. None. No bid for anything. Consider this.
See, the thing is, we got god on our side. Aka the Fed.
I joke, but only partially. I have lived through two crashes by now. First time I didn't trust the Fed. I was wrong. Second time I did. I was right. In Fed I trust.
OK, I am off to go see Zero Dark Thirty.