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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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  • S & P 1800 - What To Do Now ..... 2 comments
    Nov 15, 2013 10:49 AM | about stocks: QQQ

    The march to S & P 1800 has picked up pace in this past week and we are within a few S & P points from attaining that milestone.

    I am reminded that as we approach these round number milestones, history shows us that we can expect resistance. Combine that with a short term overbought market and weakness may ensue.. The one trump card to keep the momentum going is the underperformance that the money managing hedge fund crowd has to deal with .. They have to chase here to keep up performance with the major averages.. To get their bonuses and for some, keep their jobs. That's plenty of incentive for them to go out on a limb.

    I was fortunate to find this link which displays where the markets are at this moment and what we might expect as we move forward.

    Staying in my secular Bull theme, I do not believe this signals a 'major top" however this could wind up being the intermediate top that I was looking for...

    http://fat-pitch.blogspot.com/2013/11/your-riskreward-in-spx-is-more-than-21.html

    Stay tuned and if you haven't done so , raise some cash and sell out of the money calls on positions that are stretched..

    Themes: S P 1800 Stocks: QQQ
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Comments (2)
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  • F&G,

     

    I have been a on the sidelines with cash ever since the DOW traded on a sideways range. I was waiting for either a breakdown or a breakout. We now have DOW theory confirmation from the recent breakout.

     

    This market is not cheap, but I am long equities as of now; climbing this wall of worry.

     

    One question: Does the current margin debt not scare you at all?

     

    Rgds,
    Rico
    15 Nov 2013, 11:28 AM Reply Like
  • Author’s reply » Rico,

     

    The margin debt issue doesn't scare me but its is of concern. However keeping it in perspective it is only one of many sentiment indicators to look at..

     

    I would also mention i would be more concerned if i saw it in conjunction with wild overvaluation and rampant speculation ala 2000.
    Other than a few names TSLA, LNKD, etc. I don't see that in this market . As you said the market isn't cheap , fairly valued right here with pockets of both over & undervalued names..

     

    Best of Luck ...
    15 Nov 2013, 12:29 PM Reply Like
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