Seeking Alpha

On the hour

  • Dow -0.41%.
  • 10-yr +0.2%.
  • Euro -0.37% vs. dollar.
  • Crude -0.11% to $98.12.
  • Gold -0.23% to $1239.7.
Comments (34)
  • SPX down 3.54%, not exactly a tragedy.
    31 Jan, 05:11 PM Reply Like
  • Well, bankers are jumping off rooftops... OMG! It's 1929 all over again!1!! ;)
    31 Jan, 05:40 PM Reply Like
  • As I've said before, investors have been waiting since last year at this time for a pullback in the market so they can "get in". Now, when they are presented with a pullback, they are afraid to make a move. Silly. I suppose if you think the financial world is ending because of some bad news in Turkey, that is the right thing to do. However, I don't really see that happening. Bull markets have minor pullbacks, and this is just another one. As @Tack said above, a 3.54% pullback is hardly a tragedy.

     

    I will say this - just when you think getting short bonds is the right thing to do, bonds make a comeback. I've personally weighed this decision about 4 different times and decided to basically do nothing and that has been the correct choice each time. There must be a lesson there somewhere?
    31 Jan, 06:55 PM Reply Like
  • It always sounds right until you have held on and a real bear market arrives. In other words, the problem is this, when the markets go up, many never know when to take profit(sell), and when it goes down, many never know when to enter (buy). I have never lost taking a profit, but have lost holding on while a stock declines. Right now, after a long sustained bull market, I am on the lighten up side, and that is working for me. Greed sees all profits come and go, very often.
    1 Feb, 01:03 PM Reply Like
  • Same old story, p*ssy lose money, and the house always wins.
    31 Jan, 07:52 PM Reply Like
  • As January goes, so goes the year. 76% of the time, that is.
    31 Jan, 09:39 PM Reply Like
  • We have the Superbowl outcome indicator coming up day-after tomorrow, so stay tuned...
    31 Jan, 09:59 PM Reply Like
  • It is silly to see the Federal Reserve and Treasury make stupid comments about strong employment and growth based on November numbers even as weaker December numbers roll in which is disastrous if you look at seasonality. Are they really this dumb or are they just trying to delude the masses as GS, JP Morgan/Chase, and BofA try to dump or take the short side before everyone realizes the global economy is weakening, not strengthening. And no, it's not the weather... talk about incessant excuses.
    31 Jan, 10:29 PM Reply Like
  • You know Moon, after reading many of your comments over the last few weeks, let me say this --- every news item it NOT a sign of a conspiracy. Sometimes, things are just what they are. Learn it. Live it.
    1 Feb, 12:01 AM Reply Like
  • In that context, hope the NFC (Seahawks) win. ;-)
    1 Feb, 07:47 AM Reply Like
  • WisPokerGuy, some people apparently like the concept of conspiracies everywhere. You'd think they would eventually find a way of profiting from their knowledge, instead of just perpetually complaining.
    1 Feb, 03:05 PM Reply Like
  • I never profess a conspiracy. I merely state the obvious and try to help those who want to get their arms around what they may not understand. The economics of today is not unlike economics of the past. you need only read cause and effect through studying economics and not watching the laughable dog and pony show people call financial news.

     

    If you want to understand the "conspiracy" please start by reading Econ 101, Adam Smith, Graham and Dodd, and the Federal Reserve's Modern Money Mechanics.
    2 Feb, 06:46 AM Reply Like
  • It would seem that people will not be happy until the market endures a long, substantial retreat. Several small, short term adjustments simply will not do. Long, slow trends are what most people want because you don't have to think to trade. It gets worse. Most people only want to trade long when you can make more money going both ways. If you know when to trade long, reverse it and trade short. Otherwise, you are just leaving money on the table.
    31 Jan, 10:40 PM Reply Like
  • I completely disagree. Selling short, like trading options is not for everyone. Most simply dont have the discipline to succeed. There are too many variables. If you buy nothing buy S&P 500 stocks, your chance of major loss is small. You may not outperform the market but you wouldnt lose your savings.

     

    If you are good at trading, you have a skill most dont have. But be careful not to encourage others without that skill to venture into the pits!
    1 Feb, 09:51 AM Reply Like
  • I'm not worried.
    31 Jan, 10:43 PM Reply Like
  • I'm worried. Like, hey man, 2010 was a long time ago.
    1 Feb, 07:00 PM Reply Like
  • "Worst January since 2010"???
    This is the best news possible: As I recall, January 2010 provided us with one of the best buying opportunities in history! The S&P bottomed in January 2010 at 666 (the sign of the Devil!) to hit a high of 1850 less than 4 years later.

     

    Let's hope for another 'Devilish' 180 % increase in the next 4 years. It IS a secular Bull, and the deafening screams of Armageddon are music to my ears.
    Interest rates are low, corporate earnings are surprising on the upside, emerging market 'scares' are just that, retail investors (the general public) are still too scared to enter the market, and now we have headlines like the one above that are negative on the surface but extremely positive underneath.

     

    Where do you put your cash? Under the mattress? Or in a fixed deposit offering you a rate of return below inflation?
    1 Feb, 05:52 AM Reply Like
  • "The S&P bottomed at 666" That was 2009 smarty pants.
    1 Feb, 07:22 AM Reply Like
  • Sorry, you're right but the message is the same even if I typed the wrong year in: January 2009 was terrible but the market took off soon after.

     

    And even if you had bought at the top in January 2010 you would have made a huge profit.
    1 Feb, 01:47 PM Reply Like
  • Sector allocation.
    Whilst they fix the printers.
    1 Feb, 06:26 AM Reply Like
  • She'll ride in on a white horse,how Hollywood.
    1 Feb, 07:26 AM Reply Like
  • we needed a correction-it is a very healthy thing---it eliminates the frothiness
    1 Feb, 12:17 PM Reply Like
  • Take a look at these headlines:

     

    "Stocks slumped for a third straight session Friday, on worries that the White House's bank plan and China's lending curbs will mean a broader cutback in lending"

     

    Sound somewhat familiar? It is a sub headline from a CNN article dated January 22nd 2010.
    While history does not always repeat itself, we can learn from observing it. Consider these numbers:

     

    Gain/Loss in S&P by %
    January 2010 -3.69%
    January 2014 -3.59%

     

    In fact, in 2010 the S&P would hit a low of 1064 (January’ 2010's ending was 1073) three times. Once in June, once in July and for the final time on August 23rd, 2010. Still the year ended with an 11.33% gain with a whopping 18.13% from August onward.

     

    In July of that year we saw the “Death Cross” reveal itself. This is when the 50 day MA crosses over the 200 day MA in a downward trend. It would take until October for this position to reverse to a “Golden Cross”. (Where the 50 day MA crosses above the 200 day MA).

     

    Keep in mind, we've not yet seen a "Death Cross" in 2014.

     

    The market is never easy to predict, but we can always benefit from looking a bit into the past behavior to predict future behavior. I am maintaining my position that the overall market will gain between 10-14% this year. Here’s my reasoning:
    1. Earnings will improve over time for US companies

     

    2. $$’s have been spilling out of the Emerging Markets steadily, and need to go somewhere. The US equity market is still attractive to most of the world.

     

    3. Bond yields are relatively low, and Gold continues to be an expensive commodity.

     

    My advice is to look for the lows (Stocks are then “on sale”) in good long term holdings.

     

    Here’s to Great Investing!!!
    1 Feb, 12:44 PM Reply Like
  • The main problem I have with 2014 is that as of Jan. 1st, a record $423.7 billion of debt has been invested in the market surpassing the tech bubble and housing bubble. I think of one word when "debt" and "stock market" are used in the same sentence - ominous.
    Another warning sign is should them market continue to be volatile like in the previous month, it may be prudent to take some money off the table. You may miss the top, but there's no shame in making a profit.
    Besides, what companies are driving this speeding bullet train of greed? Twitter? Facebook? IPOs are on fire, and that's troubling how people are willing to throw money (and take on debt) at an unproven business. Are these the kind of stocks that support a broader market bull run? Wal-Mart just flashed us a sign the consumer may not be all that healthy. It's 10% of non-automotive retail spending in the U.S. so while profit rose, it's outlook was definitely not painting a nice picture.
    Then there's the realization that the market will have to support itself without the Fed's experimental tapering solution. It becomes clear how vulnerable this market is when you subtract how much the government got involved since 2009.

     

    One last thing, many investors are sitting on huge gains, 100% and more, when the future outlook starts to look less rosy, and sentiment swings in the other direction, there's no safety net, and you better believe, to protect their gains that investors will run to the exits at break-neck speed stepping on whatever and whoever is in their way.
    1 Feb, 06:39 PM Reply Like
  • By the time a death cross appears, isn't it already too late? I mean, when the 50 days moving average is less than the 200 days moving average wouldn't that mean your stock has been going down for eight months straight, non stop? I don't mean that's not a good indicator, only it's kinda late.
    But, I totally respect your reasoning because there is inflation and money from emerging markets are coming to the US, I think. But then, these emerging markets, would go into a slump, wouldn't you agree and that would be kinda bad.
    Anyway, I don't know. I mean what changed since 2008 beside the QEs and all the stimulus around the world?
    I agree with you. I feel this could be a great opportunity to buy or not. XD
    1 Feb, 07:56 PM Reply Like
  • Rather than wait to see death crosses, a simple long term moving average monitor would do. For example 2 months prior to the GFC induced 55% fall, the SPX started to give warnings by periodically closing below its 233dma. Just over 2 months and only 5.7% past the peak, on December 27th 2007, closing at 1476.27, it stayed that way until July 15th 2009, when it closed 36.8% lower at 932.68.

     

    Right now the index has closed above its 233dma for 302 consecutive trading days, nearly a 15 plus year record, being second only to a 316 day spell in 2003/04. The latter was the beginning of a cyclical bull market, while right now we are in the late stages of an extended cyclical bull. The other difference between the two periods is QE cash, which has kept the current cyclical bull going well beyond its use by date. The Fed’s assumed wealth effect mandate, at work...

     

    With the QE unwinding, this bull must end, just a matter of time and the 233dma, acting like a canary in a coal mine, will tell you. At the moment that is 97.25 points and 5.5% away, at 1685.34.
    2 Feb, 07:01 PM Reply Like
  • BN:

     

    So, you're saying if the market crosses below 1685, hardly even a gadden-variety correction, we're in a new bear market?
    2 Feb, 08:06 PM Reply Like
  • Tack, what I am saying is that when the market crosses below its 233dma, and this level changes daily as the index changes, it is a wake up call that a long term trend has been breached and that the uptrend is deteriorating. It will probably be higher than 1685, as the 233dma is still rising, unless of course Monday experiences an unlikely 5.5% fall.

     

    In a gentle top, as 2007 was, this indicator will move in and out, as bargain hunters move in, as is happening now, but if the macro force is too great, consider QEs unwinding, even those buyers will retreat and the bear will take over. When the first 233dma breach is recorded, even the most bullish should take a few reasonable precautions and not sit back and watch their capital go to money heaven... Buying TLT, which began rising late in December, is one such reasonable precaution.
    2 Feb, 09:32 PM Reply Like
  • According to the NYSE’s latest figures, as at December 31st 2013, margin debt stands at an all time record of $444,931M and this is backed by just $165,588M cash.

     

    I say just because in the 10 years data that NYSE provide on credit balances in margin accounts, the ratio of debt to cash is also at an all-time high of 2.7x. For every dollar of their own money, margin lenders are now borrowing another $2.69.

     

    Average annual ratios for the last three years are: 2011 1.2x, 2012 1.9x, 2013 2.3x, so at 2.7x the market may well be working its way towards its own "Minsky moment".

     

    Definition of "Minsky moment"
    http://bit.ly/1lvTH4n
    2 Feb, 10:08 PM Reply Like
  • Yes! Why not? A lot of people made a lot of money already, I think. If it crosses below 1685, it would cut into their profit too much, I believe. You got to believe in something why not a bear market right? I mean, after all, not a whole lot has changed since 2008. And look Barry even made an effort in trying to explain things, a priest would just tell your boys to bend over or go to hell. You still believe in God, why not Barry?
    2 Feb, 10:24 PM Reply Like
  • You can make money in a bear market just as making money in a bull market. Diversification and proper hedges are crucial to this new year.
    1 Feb, 01:19 PM Reply Like
  • Actually, I'm not really all that worried about the economy or the stock market. What keeps me up at night is the reversal of the polarity of the magnetic field and the possibility that the Yellowsone super volcano will erupt. On the other hand, an asteroid impact is also worrisome. Those folks in Colorado might be on to something. Smoke pot, dull your senses and marvel at the fireworks when the kimche hits the fan.
    1 Feb, 07:05 PM Reply Like
  • As the great trader Otis Redding observed, ships come and go. The problem most people have is that they try to do what ten people tell them to do. History will show that shorting volatility was the greatest trade for the past 3 years. But, nothing that simple can endure. The trade was linked to unprecedented liquidity. When the liquidity declines, as it has-fractionally-the response was as tepid as the bond buying curtailment.
    I don't see the decline as any kind of noteworthy event at all. Volatility is still extremely low. In order to have any legitimate decrease in equity markets, we need to see an inverted yield curve. But, pray tell, how in the world can we have an inverted yield curve given the cards that are dealt?
    And, who cares anyway? The one-dimensional folks, as usual-who will make the same old mistakes that they've always made. Some of you, like me, will simply take advantage of the panics, and enjoy the picnics. Here's the key: it's not about being a 'bull' or 'bear'-or even a magic dragon. It's about being the hunter. And I hunt with a double-barrel shotgun-and I really don't care which trigger I pull.
    1 Feb, 11:38 PM Reply Like
  • Should just say thanks to these shameless central bank rogues.
    2 Feb, 09:08 PM Reply Like
DJIA (DIA) S&P 500 (SPY)