Feeble Money

CNBC’s “Fast Money” show should be re-titled “Feeble Money”. At the beginning of the video below you can see the “traders” whine that the market is “way too confusing”, “extraordinarily difficult”, and “chopping everybody up.”

Pretty comical, right? If these people can’t trade, then why are they on my TV?

But has it really been that hard? On Monday night, I mentioned that the McClellan Oscillator was way overbought. So, you’re in a ranging market, and it runs up to an extreme overbought reading, and…what could possibly happen next? Could there be a pullback? WHAHH!!! WHAHH!!! IT’S TOO HARD!!! WHERE’S MY TRADING PACIFIER!!! WHAHH!!!

Well shoot. Instead of crying, why not just make a short trade or two? Here are my last two trades (click charts to enlarge):

Note: TLT is a bond fund, so it’s not really a short trade, but it’s usually a good bet when stocks are overbought.

Fundamental investors must endure long periods of bafflement because much of the time, stocks respond to nothing but technicals. But in a ranging market like this, fading overbought/oversold conditions is very easy. Of course, that won’t last forever. Eventually, the market will embark upon a powerful trend where it gets overbought or oversold and stays like that for an extended period.

Nevertheless, last week’s action was very easy for technical traders who have good overbought/oversold indicators.

Note: The Mac-OS is still elevated, though my other indicators have come down into the neutral range. So, short trades are not so easy now.