joethebull

FAS and FAZ: A Short-Seller's Dream?

The key point of emphasis in your post is that these ETFs both drift towards zero *in volatile markets.*

You'll note that during the tremendous plunge downward to the November lows that FAZ provided huge returns. If there is any sort of sustained trend of consecutive up or down days in the financial markets, the respective ETF will explode. If there is any kind of choppiness in the financial sector, only day trading is recommended.

That being the case, as you correctly said, investors should only short these ETFs during a volatile market. There are arguments to made that we may see a sustained downtrend in the upcoming months, however, and thus it is likely not wise to go short on the FAZ (it is already quite low, regardless).

April Sentiment Up - But It Followed the March Rally, Remember

No hedge against the downside. If you're short the market now, we closed above 875 (surprise) and will look to test 888, so you might look to day trade some bull ETFs. I'm of the opinion we'll fail the 888 test and head back below 875, which is going to signal the end of the rally and it's bombs away. Take advantage of the 888 test to add to your short positions and have fun w/ FAZ for the next few months. See you in the Fall :)

Case-Shiller Housing Numbers: The Rate of Decline Is Decreasing

The national housing trend is still downward, but there are many pocket neighborhoods throughout the US that have already bottomed and are now rising. Pricing is very specific to the area the buyer is targeting, so the best advice is to do the homework. Check out sales trends, comparable sales, and time on market for the past few months. At the same time, make the smallest down payment possible in case things change in the next few months.

On a personal note, I live in the San Francisco Bay Area, which has seen more volatility in housing prices than almost anywhere else in the US. I've been looking to purchase a house for a couple of months now, and things are heating up. Foreclosures go off the market within 10 days, and close within 30. Short sales are starting to be reviewed and approved by banks. Many homes receive 5-10 offers within the first week of listing, and on average there are 2-3 that come in at listing price or higher. In one case, the prospective buyer was willing to put 25% down and $25k over the listing price, and this isn't unheard of anymore.

Despite what the indicators show and the news reports, in some areas there are many buyers out there and they are hungry. Only time will tell if this is temporary before the next big downswing or if things are turning around.

Potential High/Low Targets for the Dow

I wouldn't hope for anything higher than 9200, but we gotta go through a correction here first.

Potential High/Low Targets for the Dow

Bombs away...

Don't Buy Yesterday's Hype

For those who are checking back here, we just failed today's test. Hit a swing point, went above, rejected the new highs and fell back down. Look for some correction next week.

Don't Buy Yesterday's Hype

Computer activity tends to pick up in early morning or late afternoon trades.

Don't Buy Yesterday's Hype

It's a trap. Today's minute-by-minute action looks like a bit of manipulation, but I agree with Jeff that we're heading for a correction. Remember how analysts say that bad news is baked into the current price evaluations?

Let's just say that good news is already baked into the current price evaluations as well.

If You Missed the Rally, Don't Get Trapped Now

The bear market rally is not over, but there will be a slight pull back from current resistence levels. I recommend averaging your way into long positions during this pullback to set yourself up for the next surge that will break out of current resistence.

The rally still has legs and will continue for a few months (with minor corrections along the way, of course). But, the economy still has yet to consume the looming commercial real estate and credit card default issues. This no doubt will throw the market back into a tailspin and there is a good chance of taking out the prior lows. Only until after these issues are dealt with will the market bottom out, only to be confronted with inflation.

Hold your nose and buy on the pullbacks, but be prepared to abandon ship when the market starts to tank. You'll know it's about to happen when the VIX starts to drop and the media starts saying that we're in the clear.

How to Profit from Market Manipulation

In times of economic downturn, conspiracy theories run as volatile as the market.

Read the charts, watch the technicals, and stick with the trends. It's much easier to trade successfully based on a strong fundamental strategy than theorizing about the motives of scary men hiding behind curtains pulling levers.

To Those Who Are Giddy Over 3 Day Rally: Get Ready for a Pullback

I predict that Johnny Rotten will either change his tone or take his childish comments somewhere else before the powers that be at Seeking Alpha force the issue.

Gold Should Bounce Off Support and Move Higher

Nearly all of the gold miners are hitting key support points after a short correction and should rally along with the rest of the market. However, Gold itself is in a major correction, and although it too may find support and edge higher on a few occasions in the immediate term, the short term trend is still downward - possibly as far as $800 or below.

With this in mind, adding positions in the gold miners might not be the best play for this rally, as there are other sectors that will see more dramatic movement (financials, anyone?). It's not a losing bet, but there is a good chance the miners will revisit their current prices once again later in the year as well (and much lower). Gold and gold mining is going to be a phenomenal play for the next few years -- but for those looking to go long now should wait until the correction is complete and this current bear market rally subsides.

This Morning's Bull Stampede: Proceed with Caution

Jeff, many analysts have been projecting an upcoming rally for a few weeks. Nobody has successfully predicted the actual start, but nonetheless the prediction of a sustained rally for a few weeks is echoed frequently. What indicators are you using to suggest that this current bull stampede is not actually the start of something sustained?

Not criticising your conclusion, as I think your advice is very sage and well-suited for the market conditions. I just respect your opinion greatly and would love to know the basis for this particular conclusion within the context of the other analyst predictions.

Thanks :)

Dollar and Gold No Longer Headed in the Same Direction

Now is not the time to buy gold or miners. The short sellers of the financials are taking profits, causing a snapback rally that has been anticipated for weeks now. With Citi announcing profitability and Bernanke calling for a concerted effort across the world to tighten regulation of the large banks, there is plenty of reason for those invested in gold to take profits and jump back into the financials. The rally will continue for the next four to six weeks, after which we'll see a crash back down to Dow 4000. Not until the peak of the next rally will gold and miners be the correct buy, while the rest of the market hits its true bottom.

Why Gold Miners Aren't Glittering

Gold is just going through a temporary correction for now, with the miners chopping around between resistence points. This should continue for a bit as the overall market attempts to rally in the near term. The signs of a fledling rally have been around this entire week, with not enough volume to make any significant moves and really break out. Eventually it should happen though, as we certainly don't have enough volume to push the market below its current resistence.

That being said, sometime around beginning to mid Q2 things will shift once again. The market rally will be over and the downtrend will continue. The flight to quality will be greater than before as the market plunges below the current lows. The gold rally will pick up full steam where it left off before, continuing to make higher highs, and the miners will soar.

The difficulty in assessing the strength of miners just depends on which side of the fence the assessor sits. They either buy into what I've just described, or they don't, and they evaluate the miners accordingly.