The Sky’s the Limit!
The euphoria on CNBC is reaching absurd levels. Several times yesterday, I heard talking heads telling me: “Earnings will be horrible! Buy! Buy! Buy!”
Sure, the stock market can ignore bad news for extended periods of time. But this time around, bulls are going to need to be content with the lackluster earnings of their stocks for quite a while – like possibly the entire year.
Can investors ignore bad news for that long? Maybe, but I doubt it.
The worst thing I saw on CNBC was Don Luskin on Kudlow’s show. He’s one of those guys, along with Jerry Boyer, who has one of those little “I’m insane” grins on his face all the time. Luskin said someting like: “the upside for stocks is unlimited!”
That from a fool who ridiculed guys like Barry Ritholtz and Peter Schiff when they warned about the recession last year.
When CNBC and clowns like Luskin tell me that the stock market is passing out free money as the global economy crumbles, I am forced to conclude that we are seeing a fantastic shorting opportunity.
I’m back in cash with large profits on the deal.
The TICK is back into positive territory, so the market might be able to retrace into the close.
WTG Matt…
out of QID as well just SRS left.
I would have stayed short longer, but the selling volume today was light.
The market slipped on one of Jungle Girl’s banana peals, put maybe her bear is a vegetarian and not too vicious – at least until the next dream.
Thanks George.
Grats on the profits Matt.. btw.. what is your bounce target or do you think this was just the market selling off due to the extreme overbought condition and that there is more upside?
so we did bounce off 50SMA in 15min chart. 917-924 then we’ll see if we touch too many live wires.
matt thanks in part by you we all saw this coming
Shorts have been starved for profits so they are rushing to buy-to-cover now. Doesn’t mean that the correction is over though.
oh crap i didnt see the 907 live wire. i guess it might just give it a jolt or enough for it to fall.
Thanks K, Charlie.
Charlie, I don’t know yet. I need to study today’s action more.
Great work Matt, cleaned up here myself.
I think it was the right move to cover in the low 900s, I did the same FWIW…I think this dip may get bought in a most middle of August way.
Are there enough profit-taking shorts to keep the market up into the close?
Danny,
Maybe so, though if I were a bull I would wait until Friday morning after the jobs report. Maybe I could get a nice, low price.
Matt
SPX went down to the 9MA on the daily and touched it. The Qs didn’t quite make it, but close enough.
is anyone holding anything overnight?
HAAAAAAAAAAAAA the live wire at 907 seems to have been all that was needed for now.,.. 15min..
http://i42.tinypic.com/24o9jmb.png
am thinking SRS charlie. not the best to hold but oh well.
but if within this hr we see a spike to 917 for some reason I will not blink until i have rebought SDS
.. looks like am getting my 8 handle wish NOW….
SPY is now very oversold on its 60-minute slow stochastic. The market should be able to manage at least a feeble bounce tomorrow, but I can’t imagine it getting too excited in front of the jobs report.
K,
Nice call on 907.
Matt
Futes are struggling to hold the 9 handle. The bid is at 900.25 now.
stumbled upon this website.. what do you guys think? anything worth reading?
http://www.etfplanet.com/ am just looking around seems to have some nice info. of course all am looking is for more symbols 
Matt you said youre back to cash.. does that mean that you have no holdings? or still have futures?.
we once again hit 50SMA on 15min.
blood doesnt care if its zapped as much. so i stand by my 897 target although i wish it would bounce over 907
Charlie, I was thinking of getting some SSO overnight.
The XLF has broken the green line on my Grand Alignment chart:
http://www.trivisonno.com/xlf-grand-alignment
K,
I took profits on my futures, so I have no positions now. My goal is to only trade once or twice a month and goof off the rest of the time. So far, it’s working. I don’t need to work for a couple of months after today’s profits.
Matt
really Matt?…. WOW and my investment club at school wants to average down BAC a THIRD TIME (we’re all students but none as involved in real trading as me). i will just shut up. its worked good so far and ive earned their respect. when they dont listen and am right they then always ask.
K,
Do the other memebers of the club know who Meredith Whitney is?
Matt
Got out of SDS at $70. (Thanks George) Too hard to tell which way we go now, and don’t want to be wrong on a gap. Rather wait and see what happens after open tomorrow, becuase we have a big battle around K’s 907 ish level.
I think we do get a move up towards the Inauguration, and then…look out below…
K;
I like the “goof off” part of your plan.
Great day today.
Note: While I started my short position a few days ago at 900, I have been building it since then as the market went up. Coming into this morning, I had a gigantic short position, so I was able to profit even though I started way too early.
sounds good Matt. My goal is to develop a system that will work fairly well and that can recover from draw downs fairly quickly. but it takes time so i just take risks learning to trade like we all are.
aaaaand looks like 907 live current is still strong.. maybe its using European 240 Volts supplied by our very own Dressguard.
Buzz, that’s a good point. Wacky days deserve caution, especially the next day. I normally don’t buy at the close, but I’m thinking volatility is worth something.
Matt;
I believe that is a good strategy if one knows what they’re doing. That is similar to my “core” positioning. After I compete my study on my “new” strategy, I will begin doing my core again.
Matt,
The bananas are gone, the bear is still hungry, and all that’s left at the market is bull.
When shorts scurry to cover after getting burned over and over, that’s about when the game changes. Have to study up tonight, but we’re at the cusp of going down, and my most important signals throughout this bear are saying hold short. I expect the picture to be clear “shortly.”
Matt,
this is part of my secret sauce along with around 30 blogs that i have subscribed to using google reader.
I doubt they know who she is, nor Barry Ritholtz, nor Peter Schiff, haha not even Matt Trivisonno!!! I mean come on, you don’t know the rest but you gotta know Matt. I wont give this site away to the class yet
I guess they only know Cramer huh?
well probably. but quite a few of them know “analysts” you know… those people that say BUY a stock when its time to SELL. and SELL a stock and its really time to BUY! ?
analysts and estimates is all I hear from them.
I am mostly economics advisor in part because am too lazy to look at fundamental data of stocks so i can write a report.
AIPC in november.
CPD in december
and HDIX Now. (this i sent a report on the 29th of december) got this back today…
“Hi K,
HDIX looks decent. Eearnings fell dramatically within the first quarter, but that was mainly due to a large supply to a retailer, which led to an inventory backup. Despite this, the company upped its annual revenue guidance and confirmed its guidance for EPS. The industry also has plenty of potential and competition is modest. There is also a share buyback of another 5 million. It looks pretty decent and I think we should give it a shot.
What does everyone else think?”
Ummm slowpokes of the world! from my date to now HDIX is up 17%. i bought it for myself but with a stop and it hit it before going on a 17% hike lol. oh well.
Matt, Nice trading. I also started at 900, but my steps were too big (950 & 1000). I guess I am still in rip your face of VIX mode.
When I saw two failed attempts at $94.5 yesterday on the SPY I added shorts AH @ $93.3.
newbie,
Nicely done. Trading is never perfect, and we might have to start worrying about our faces again since JungleGirl’s Vix gap has held nicely. No telling how high it will bounce.
Matt
junglegirl,
I see what you mean. On December 1st, the market plunged all day. The shorts didn’t even think of taking profits. They, at least “I”, were way overconfident at the time.
That day can be said to have kicked off this rally since it was the bears’ Waterloo because the market snapped right back.
Now we have the opposite situation: Bears too timid to press into the close, which may show that they have room for ego expansion.
Matt
Matt,
You took profits at a perfect chart point. I’m not trying to confuse anyone on that. I can’t routinely trade a.m. market action, which necessarily affects how I trade.
That said, I do believe the market is cracking here. I didn’t anticipate the time dilation that occurred in December, but the price projections are still for us to go down hard.
Most likely Elliott Wave Count is that we have completed the first wave of wave (5) down and the wave (4) rally is over.
Oh yeah I have a target of 625
Same here Matt, I shorted at 900 and pyramided up hard, incidentally, something I usually don’t do.
I really am digging the 4:42 comment. That sentiment makes complete sense.
hey guys i just made a bet with a friend TBV below $2 on EOD January 30, 2009.
what do you think.
bet is for $1 but he said he’s gonna buy some tomorrow and on my indicators this is SUPER EXTREMELY OVERBOUGHT
JG, I presume you are still holding shorts? I still have 1/3 of my SKF and SPY positions.
newbie… yes, and sleeping very well.
JG, Did you take anything off today?
My sweatshirt. Over and out.