Thursday, December 20, 2012
Thursday, November 15, 2012
Wednesday, November 14, 2012
Wednesday, November 07, 2012
Tuesday, October 16, 2012
Thursday, September 13, 2012
We got another jump today after the Fed announcement - let's see how long this lasts.
Friday, September 07, 2012
The Dow has bumped into an overhead resistance line that's been tested several times as far back as March. If the Dow breaks through, then there will be no more trend-line arguments against a new rally.
Wednesday, August 29, 2012
Monday, August 13, 2012
In other words, I'm watching for the next bear market signal.
Wednesday, August 01, 2012
Flood of Errant Trades Is a Black Eye for Wall Street
An automated stock-trading program accidentally flooded the market with millions of trades Wednesday morning, spreading turmoil across Wall Street and drawing renewed attention to the fragility and instability of the nation’s stock markets ...
“The machines have taken over, right?” said Patrick Healy, the chief executive of the Issuer Advisory Group, a capital-markets consulting firm. “When events like this happen they just reaffirm that these aren’t investors, these are traders.”
Tuesday, July 24, 2012
If you suspect as I do that the S&P 500 will top out around 1550 for a third time before plunging again, then any rally from this point would gain ~15% at best. Is it just me, or does that seem like a small reward given the downside risk of a collapsing global economy?
Saturday, July 14, 2012
Friday, June 29, 2012
"It is not our job to protect the people from the consequences of their political choices."In other words, mob rule and its inevitable offspring, dictatorship - precisely what the Constitution was meant to prevent - are now the law of the land. The Constitution no longer applies at the most fundamental level. I see almost no theoretical limit to which inactions can be penalized, nor how large the fines can be, so this pretty much opens the door to total government control of our lives. It was an amazing and unprecedented 236-year experiment in liberty, but all good things eventually come to an end.
That, as they say, is that.
Friday, June 22, 2012
Tuesday, June 19, 2012
Friday, June 15, 2012
Thursday, June 14, 2012
Monday, June 11, 2012
Bearish ETF Drinks Up Bad News. ... Jody Wilson, a 45-year-old planetary astronomer and amateur stock trader, said he had been waiting "for years" for such an ETF ...
Friday, June 08, 2012
If I do end up selling HDGE at these prices then it will result in a disappointingly small return for me. This correction had a lot of promise at the beginning, and I expected it to fall further than this, but I've never claimed to be a perfect forecaster.
Thursday, June 07, 2012
Monday, June 04, 2012
Sunday, June 03, 2012
Although I expect the S&P to bottom-out near 1200, meaning HDGE will gain some more, I'm not going to hang on to my HDGE shares blindly. If I see turn-around signals in the market earlier than expected, then I'll sell my HDGE shares sooner. Hopefully I cash out with a decent gain either way.
Friday, May 25, 2012
Thursday, May 24, 2012
Tuesday, May 22, 2012
Monday, May 21, 2012
Eventually the market will break out of this trend, probably with either with a bang or a clunk. If the fall accelerates into a crash, then pessimism will spike and the end of this correction will be at hand relatively soon. On the other hand, a newsworthy steep rally can improve the mood of investors and open the door to more losses over a longer period. Either way I'm still hanging on to all of my HDGE shares for now.
Wednesday, May 16, 2012
My goal when buying HDGE is simply to gain money when the market falls, and if this ETF manages to gain the same amount that the S&P 500 loses in a correction then I'll be satisfied. The fact that HDGE has out-gained the inverse of the S&P by nearly 3-to-1 so far in the month of May is icing on the cake. There will probably be some brief rallies lasting a day or two during this correction, so HDGE may have some down days before it's over, but that's OK as long as I cash out with a net gain.
Every stock market sentiment indicator that I use is still on the bullish/optimistic side of neutral, which is bearish for the market because sentiment is indeed a contrarian indicator. But this article from Yahoo! Finance apparently found one specific indicator, "the consensus view of U.S. equity strategists from major banks", that is actually somewhat pessimistic about stocks and therefore pointing to a bullish forecast.
Even if this one indicator is pessimistic (and therefore bullish) as advertised, there are a couple of flaws with this article. First, the title ("Even Pros...") implies that there are other groups that don't like stocks, but the article itself supplies zero specific examples of pessimism elsewhere, just a quote from one strategist who says "we already know that investors of all types currently hate stocks." Actually we don't know this, because other measures of sentiment are still "pro-stock." The second related flaw with the article is that "U.S. equity strategists from major banks" comprise only a small fraction of all investors, and therefore can never be representative the overall bullish/bearish sentiment in the market.
Most of all, an article like this one that gives a bullish forecast - regardless of the reason - is in fact optimistic about stock prices and therefore just another bearish indicator. Yes, "ironic" pretty much sums up the stock market.
Monday, May 14, 2012
Everything is in place for the S&P to decline to about 1200 from here before starting another rally. Volatility is still low and hasn't yet reached high levels. Sentiment has changed from optimistic to neutral, meaning there's still room to fall before sentiment reaches the pessimistic levels that can re-start a rally. Finally, money flow (which I neglected to check until today!) has been falling from a recent high peak, exactly as expected near a long-term market top.
The best part of being in a bearish stance right now is that I can profit from the short-sighted folly of all those in the USA and Europe who though it was a good idea to borrow limitless amounts of money. If the European Union were to implode tomorrow and trigger a global market crash, I would earn a tidy profit. I don't wish economic pain on anyone, but I know what's coming, and I'll sleep soundly knowing that the worst-case economic scenario can actually benefit me at this moment.
Thursday, May 10, 2012
Tuesday, May 08, 2012
Thursday, April 19, 2012
Wednesday, April 04, 2012
Despite the steady gains, investors have actually gotten less optimistic in the last couple of months - a sure sign that the rally still has room to continue.
When the Drudge Report has a blaring headline in response to the first significant down day in a while, you know that the consensus (and therefore probably wrong) short-term forecast is for a market decline. However, the above is only the technical analysis of current conditions based on price changes and investor sentiment. The longer-term fundamental conditions of ever-growing debt, Europe on the brink and low dividend yields are still quite bearish.
Tuesday, March 06, 2012
The updated money supply graphs from shadowstats.com are always available in the right-hand column of this blog.
Gold is obviously one popular way to hedge against inflation, but for those who fear gold might be in price a bubble and wish to diversify their bets, there's an ETF that moves in the opposite direction of the dollar: the PowerShares US Dollar Bearish Fund (ticker: UDN). I do not recommend this fund as a long-term buy-and-forget investment - instead I think it's better suited as a temporary hedge against inflationary periods. Unfortunately UDN uses derivatives to accomplish its task, but any meltdown of the derivatives market is far more likely to happen during a DEflationary period than an inflationary one.
Saturday, February 25, 2012
Since this last correction never passed the 20% decline threshold for an official bear market, it means that my technical method of predicting bear markets was successful - in April it did not foresee a bear market.
All things being equal, I'm inclined to predict that in the long run the stock market will approach the overhead resistance level of the 2007 peak and then descend into another bear market, but if that forecast becomes conventional wisdom then I have a problem, because my philosophy holds that conventional wisdom is usually wrong.
In the short term I'm a little leery of this current rally because of the low volatility and moderate optimism that's prevalent now. Given the looming global economic precipice and insanely low dividend yields, I would need to see several short-term stars align before I placed any bets on a continuing rally.
Thursday, January 19, 2012
The problem is that other indicators are quickly reverting to more optimistic values that are more typical of market tops than market bottoms, so this rally could be over not long after it's begun. Notice in particular how little volatility there's been in the past couple of weeks. No, I'm not going to jump into any bull market funds any time soon.