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Fear & Greed Trader
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INDEPENDENT Financial Advisor / Professional Investor- with over 30 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
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  • Market Update 10/15 - The 11th Hour 25 comments
    Oct 15, 2013 5:47 PM | about stocks: SPY, QQQ

    My thoughts on the market and the continuing "theatrics" being played out in DC..

    If this market sells off on the next few sessions it will be done on "fear" and not fundamentals .. A classic sign to buy if and when that opportunity is presented.

    I have found it is difficult if not impossible to produce consistent portfolio profits by trying to react based on the news of the moment -- because its the same news every other investor is aware of.

    The better course of action for investors is to always stay focused on the forces of supply and demand, AKA , Price Action. Use that information and structure your portfolio in accordance with the dominant trends of the market. That dominant trend is still in place and is UP. I laid out how the market reacted late last week from a "price action" & technical standpoint, and it confirms the uptrend.

    http://seekingalpha.com/instablog/706857-fear-greedtrader/2307982-market-update-10-13-crosscurrents-everywhere

    Since then the Russell 2000 small-caps made another new all-time closing high just yesterday, in spite of the nonsense in DC. This is a market telling you it wants to and wil go higher .. It is looking past this debacle in DC.

    Some fundamentaal points to consider with the overall global economy:

    Stronger Overseas demand ... About 40% of S&P 500 corporate profits are derived from global sources. It is not only the United States that had a PMI that was above 50 and rising in the third quarter - so did Europe, China, and Japan for the first time since early 2009/late 2010. After Europe acted as a drag on overseas sales for the prior six quarters of recession, the economic improvement seen in the third quarter in Europe may result in better international revenue. From industrial production in Germany to machinery orders in Japan and vehicles sales in China, demand is firming around the world. That can only be beneficial to the bottom line.

    Copper (the proxy for global growth) demand highest in 18 months ..

    http://www.bloomberg.com/news/2013-10-14/copper-advances-as-china-imports-the-most-metal-in-18-months.html

    So while the majority is focused on Washington, the global fundamentals continue to improve..

    A selloff here will be a knee jerk reaction to an issue that we have seen and dealt with before, ,, If presented I plan to use that "fear ' to my advantage...

    There is a simple reason for higher stock prices, both now & in the future : Better economic conditions and higher profits.

    Best of Luck to all...

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Comments (25)
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  • BlueSkyForever
    , contributor
    Comments (2253) | Send Message
     
    F&G it is a gamble to wait & see if the Tea partiers take us over the cliff. If that happens, we can expect at least 2,000 points down. Scary stuff. Tomorrow will be riveting. Why are they putting us thru this pain, and the rest of the world along with us? Nothing like negotiating the debt limit with a loaded revolver pressed against our heads.

     

    I'm watching gold like a hawk. It's up today and maybe up tomorrow. There will be real opportunity here for those with strong stomachs.

     

    If we go over the cliff, gold will go up & stocks will crash. If you are nimble, you can make a lot of $ off of this craziness.

     

    $DPZ is down $4 and looks like a buying opportunity. Along with all the other good stocks that may crash tomorrow....hmmm.

     

    Don't they realize what this is doing to the housing market? If we go over the cliff, home prices will plunge & mortgage rates will skyrocket.

     

    Let's hope the DC schmucks do the right thing so we don't crash & burn.
    15 Oct 2013, 06:51 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Blue,
    If they take the market down 2000 points, it will be a GREAT buying opportunity ..

     

    The folks that maintain a Sane approach will come out of this smelling like roses .. :)

     

    Best of Luck !
    15 Oct 2013, 06:59 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Keeping an eye on what really matters : Earnings

     

    So far so good, INTC, Yahoo, JNJ, BAC, JPM (even with their legal issues) all had good results..

     

    Although the street as always will pay attention to the forward guidance that company's roll out.. I will take that info more lightly this quarter given the antics in Washington,, There isn't a CEO , that will put their neck out there with the uncertainty that DC has provided for corp. America. Lets face it , its a great built in excuse to downplay any forward guidance ... and the CEO's will play it that way ..

     

    Look for opportunities on any individual sell off due to "guidance".

     

    Case in point (SWK) , just reported a "beat" for this quarter , yet gave soft guidance .. the stock is down about 11% in the pre market..

     

    I haven't done any research yet (there maybe more to the story) on SWK , but it provides an example of what may take place this quarter. Its just a matter of picking out the diamonds that the market will give us..

     

    16 Oct 2013, 08:58 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2253) | Send Message
     
    F&G, futures are down for tomorrow. Expect a down day on Friday, and maybe for awhile. Investors are worried about the budget battle to come.

     

    Congress is doing a good job putting fear into the mix. What they should do is reform the tax code, so corporations will come back & start hiring here in the USA. Total idiots in DC are keeping the economy from recovering faster.

     

    10:22 pm EST & the bill hasn't past the House yet.
    16 Oct 2013, 10:18 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Blue , agree the DC crowd is stil a huge headwind to the market,,

     

    Lets not lose sight of the fact that when this nonsense started, S&P was 1687,, today 1721.. More volatility, but the underlying trend remained intact ...

     

    Going forward it wil all be about earnings .. It now may have become a stock pickers market,, the Easy money has been made this year,, Now, in my view is more gains will be company specific..
    Plenty of opportunities are still out there.. JNJ,AXP,VZ -excellent quarters along with the banks.....

     

    They are throwing IBM away , and take a look at EBAY today..(good quarter but guidance is light by a couple of cents ! - its getting hammered in pre market.. ) What CEO is going to give strong guidance at this point ? It has to be taken at a discount ......

     

    i still have more research to do on both names , but they have moved to the top of my radar.. all based on emotional "fear " selling ..

     

    Good luck ..
    17 Oct 2013, 08:54 AM Reply Like
  • Tack
    , contributor
    Comments (14586) | Send Message
     
    F&G:

     

    IBM probably a good possibility, but Ebay is threatened by the transition of its business away from auctions to pure retail sales. The more it's business resembles Amazon, the more it is going to have to advertise and compete against Amazon to grow. Growth costs money. It's not clear they have a strategy.
    17 Oct 2013, 09:07 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Tack,

     

    Thanks for your thoughts , always welcome,,
    Lets see where the dust settle's on IBM ,,

     

    Ebay to me is more of a intermediate term holding,, also like to use it in my options portfolio to buy & sell covered calls. I have bot & sold calls three times this year in the 52.50 range.. It has possessed a trading range between 49 & 58 the entire year.. 49 might be tested this time around..

     

    any thoughts going into year end ?

     

    Best of luck ....
    17 Oct 2013, 09:15 AM Reply Like
  • Tack
    , contributor
    Comments (14586) | Send Message
     
    F&G:

     

    "...any thoughts going into year end ?"

     

    I'm not sure if this was a question about Ebay or the market, generally, but, as I don't follow or invest in Ebay, I'll assume the latter.

     

    I'm not looking for any dramatic developments, one way or the other. I just see continued gradual improvement, which, if anything, may accelerate as credit expansion increases. We are starting to see signs that banks are opening up the credit windows a bit. Also, I like the trends I observe in Europe and Asia, which buttresses my view. My dog-of-the-day play for large future sizable returns is Brazil, where many issues are beaten down 75+% from recent highs.

     

    Beyond the global perspective, I can imagine, as things improve, that we will see, at some point, additional inflationary pressures, which makes me increase weightings of firms in commodities, energy and selected real estate, all of which perform well in inflationary conditions.
    17 Oct 2013, 09:26 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Tack,
    yes i was referring to the overall market,,,

     

    Thanks for your thoughts.. agree with the steady and long awaited improvement we are seeing in Europe, Asia as forces to keep the LT story moving in the right direction..

     

    I just started to do some research on Brazil , as mentioned its beaten down and thrown away,, Time to nibble..

     

    Enjoy !
    17 Oct 2013, 09:35 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    Hi Everyone!

     

    I've come to appreciate the wisdom of not selling all out, Fear! Already done, had three missed opportunities to get in. ...but now it's time. I'd rather start by getting into index ETFs, then sell some to buy into individual stocks as I get more comfortable with stock picking.

     

    So my question to everyone... if I go half back in, in the next few days for a longer haul, does that seem to make sense?

     

    I'm wondering if that correction is around the corner. As I watched 6 1/2% pop, about 2-3% from it's last high... I got the willies. It's too much exuberance for "not killing ourselves." It seems to be fundamentals are mixed & not getting much attention & not the cause of this round of highs. Retail isn't back in & isn't exuberant so I don't see a top-top. But I'd rather not get in right before a nice down turn. I was going to put tight stops at 1.75% on indices...

     

    So I'd really appreciate any thoughts or advice! My timing's been poor, and I tend to get in right at the end of a run up...

     

    ------

     

    On a different note, can I admit my errors?

     

    I'm a newbie. I'm not doing well at this yet. I lost 7.25% on a lot of money (1/4 of my funds), trading in & out of NUGT. I was sure it was going up today -- which it did. But somehow caught it on the couple of big fluxes down each time, & left the house in between. So, I'm changing tactics & getting back into my buy & hold. Being out of the market during the summer cost me a much bigger amount. Well, I'm not the only person who's done poorly... Just wanted to put it out there, and off my mind a little...

     

    DUST will pop soon... but I don't want to get in & get burned again. I give NUGT another day, maybe two - till the upset & memories fade a little from this cliff hanger.

     

    -----

     

    Hum... Brazil does sound interesting. How would you invest there? An ETF, individual companies?
    17 Oct 2013, 08:48 PM Reply Like
  • Tack
    , contributor
    Comments (14586) | Send Message
     
    curls:

     

    Having read many of your posts for months now, in all honesty, I don't think, presently, you will be able to overcome your anxieties and produce positive results by picking individual stocks and ETF's or by being preoccupied with every minor market perturbation. I would sincerely advise you to avoid market guessing games and trading, altogether, pick about 6-8 Vanguard mutual funds, diversified across various sectors, and including some stocks and bonds, and stay away from the controls, except to routinely add savings to your holdings over time.

     

    This will produce positive, compounded results over time. Your present approach and temperament is going to result in the loss of much, if not all, of your money.
    17 Oct 2013, 09:01 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    Hi Tack

     

    Thanks for the thoughts! What you've suggested is exactly, above, what I said my plan is! Once I get back in the market like I have been for 3 decades, I'll feel more comfortable.

     

    I can see where you conclude I'm anxious. But it's been a very unusual summer, & it's not my long haul personality at all. Which is why I figure I'll be decent at trading. However, right now, I need to get back into the market with my long term investing. It's making me anxious not be invested! (I needed to be out this summer.) I know it's hard to believe -- but I'm one of the most laid back about my investments & have been for three decades. I went through those three crashes without a wince & kept adding. I always ask a lot of questions, on any topic. I know plenty about long term, I wanted to understand the market from the moment to moment & build from there - it's a style I have of learning.

     

    ------

     

    My key question is on getting back in. If everyone is nail biting, then I'd want to consider that. Otherwise, for the long haul, it doesn't matter much if I get in now, or a month from now.

     

    Since my May interactions with IT that had me thinking tapering would create a crash, I then shortly, concluded no crashes are coming. I missed a few entry points because of personal distractions where I couldn't pay any attention to the market (grrr.) ..........
    .........But for the first time I got an image of a correction really coming, about two-three weeks from now. It was probably triggered by watching rapid climbs over the g'vt not shooting itself, & exuberance - and nothing can go wrong now sense in the media. ... that made me think of a mini-top. Too complacent. Without fundamentals directly driving it at the moment. So I wanted to see if anyone else picked up that sense, before I jump in. My intuitions are often on in life, but I'm new to timing the market so I wouldn't want to rely on that. On the other hand there's lot of liquidity & nothing on the immediate horizon, so it could keep climbing.

     

    If I go into ETFs, like I have been before, then I don't need to go into individual stocks until I've researched them... which makes it more time manageable.
    17 Oct 2013, 11:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Curls,

     

    I would agree with Tack's advice , As I too have noticed your anxiety, unsure approach to investing,, That should not be taken as an insult..
    Many have that same problem and it is not easy to overcome.. As u have witnessed playing the timing game "in & out " ,especially with leveraged etf's is simply guessing & gambling ..

     

    The only thing I might add to your entry approach is to divide your entry into 3 or maybe 4 different pieces rather than just 2...

     

    IF u decide to go into individual equities, stick to the dividend growth champions , they will produce results over the long term.

     

    Best of Luck
    18 Oct 2013, 09:11 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    @ FG

     

    Thanks. Of course my approach is unsure. All of this is new to me, so until I know what I need to... I'm unsure. That's the point of questions before taking actions. So I'm puzzled by the assessment .. does no one come here who is new to so much of this? Almost every term has been new to me. Though I have noticed that almost everyone on this site has been researching on their own before commenting (which I was until IT's blog.)

     

    My conclusion is that I need to go back to my basics, get that set up. Then I'll be more grounded.

     

    Thanks for the ideas. Going in batches makes sense. I was going to go into different ETFs & stocks, over a bit of time, so automatically it'd be in batches.
    18 Oct 2013, 09:53 AM Reply Like
  • Robert Duval
    , contributor
    Comments (6588) | Send Message
     
    Tack, good advice to curls. What do you make of gold and treasuries taking off? I think it's a little interesting. Long treasuries for a trade.

     

    On another note, brazil is at the top of my list for a long term investment. Political changes would cause an explosion.
    17 Oct 2013, 10:04 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Macro,
    i have watched & enjoyed your commentary on Gold.. Looking at the chart , i still believe until this downtrend is broken, the path of least resistance is down ..

     

    Gold bumped up against the 20 day MA on the weekly chart.. A knee jerk bounce from being oversold , may explain the rise we just witnessed..

     

    The rally would have to be sustained from here for me to reconsider my "short "..

     

    As you have stated the environment ahead of us is poison for Gold..
    18 Oct 2013, 09:19 AM Reply Like
  • Tack
    , contributor
    Comments (14586) | Send Message
     
    M:
    Gold rising, while Treasuries do likewise, in an otherwise calm market, is totally anomalous. I don't think either will be maintained. I am looking for gradually rising rates on strengthening global economies.

     

    Gold is just the usual wild whipsaw. It'e never been of interest, as an investment, for me.
    17 Oct 2013, 10:12 PM Reply Like
  • Robert Duval
    , contributor
    Comments (6588) | Send Message
     
    I agree with buying the dips, but I am shorting this celebatory, blow-off type move, right here right now. 60% net short, long treasuries.

     

    This is likely a short term blow-off top
    18 Oct 2013, 10:35 AM Reply Like
  • Tack
    , contributor
    Comments (14586) | Send Message
     
    M:

     

    There isn't any blow-off top in the S&P, if you mean the market, as a whole. We were at 1700 in August, 1720 in September and now 1740 in October. This is just a slow-steady increase, surrounded by all the recent Government hysteria.

     

    And, the trend is supported by corporate results, an improving Europe and bullish number from Asia. No bubble, and still lots of skepticism being shown in articles and comments, the perfect wall-of-worry recipe.
    18 Oct 2013, 10:52 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    @Macrotrader100

     

    Do you mean shorting the blow-off top of gold or the general market?
    18 Oct 2013, 10:41 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » Agree with Tack , I also do not perceive this to be a blow off top ... many are getting caught up in the actions of a google , (up 100 in a day ), a netflix, chipotle, etc.. .. they are not a proxy for the market in general...

     

    I stay focused on a GE,, JNJ, Banks, Amex, etc. , etc. --their charts show a slow & steady climb and all are in major uptrends- and some are selling under the average market multiple.. This market is still doubted, and its the poster child for "Tacks" 'wall of worry' ;)
    18 Oct 2013, 12:41 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    Any thoughts on (OTIV)? It was on SA news with receiving Mastercard certification, so it can now be used with smartphones.

     

    Seems like that's the entry point for a lot of room to grow over longer term. It's gone up 20% from 1.50ish to 1.80 today since the announcement. But still a reasonable entry point?? I'd take a small position, but I'll like to start learning better on assessing individual stocks -- and this approval seems like a solid reason for a company to perform.

     

    From SA:
    " On Track Innovation's (OTIV) Wave, a near-field communication payment solution for smartphones, tablets, and PCs which uses a device's audio jack, receives certification to use MasterCard's Mobile PayPass technology. Wave allows users to pay with their device instead of a credit card.

     

    CEO OFer Tziperman: "We can now begin to target large-scale implementations with banking institutions and payment card providers, as well as projects involving public transportation, institutional memberships, and loyalty and rewards programs.""
    18 Oct 2013, 02:58 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    For trading, I called (OTIV) very well. It popped up 85% last week! Too bad I didn't buy into it, grrr. The gains were based on getting several business contracts, and in mid-Oct there'd been a lot of insider buying. Now that it's up, it keeps popping and then sinking... it could be a good long term buy, but as higher risk, not core holding, IMHO. I'm still not buying yet.
    23 Nov 2013, 11:33 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6809) | Send Message
     
    Author’s reply » LOMH,

     

    Sorry , I never saw your first comment on (OTIV) , I am not familiar with the company , I will take a look. From what u stated it appears they are in a filed that has some competition . The 'square' device comes to mind and of course verifone has applications in that space..
    24 Nov 2013, 09:06 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5792) | Send Message
     
    Thanks Fear. They do something I've been waiting to see -- you don't need your credit card. So there's handheld competition, but this is another direction edge. I'd want to research them more & I'd think the competition could be a problem for long term investing with them too though.
    24 Nov 2013, 10:58 AM Reply Like
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