Stocks and bonds
bounce back
The last five days have been quite an adventure as
volatility has come back to Wall Street. The
problem is it is happening so quickly that it is
difficult to play. It is an options expiration
week, and that could account for some of the action,
but this schizophrenic behavior is tough to
interpret.
Chart provided courtesy of
www.decisionpoint.com
I made an interfund
transfer yesterday putting me 100% in the G fund
today. Yesterday we finally saw a relief rally
in the F fund and I used that to get out of bonds.
I still think bonds could be at a good buying
opportunity in the short-term, and possibly for a
longer period, but the excessive weakness lately
made it necessary for me to stop the bleeding - just
in case. Similar to Trader Fred's system
hitting the stop loss last week. To avoid
disasters.
I am going to call on RevShark today to help me out
today since my son's team had a doubleheader last night
(Wednesday) and I am running very late again.
Here is yesterday's "Around the Reef" article from
RevShark. He write theses daily market wrap ups
each afternoon for us as part of the
TSP Timing Newsletter service.
These "Around the
Reef" articles are geared toward general market
direction as he
would trade his non-TSP account. It is not
related to the TSP funds. He focuses on TSP in
his weekly newsletter. Here is what a
professional trader and hedge fund manager thinks of
the recent activity:
Not only has the action been volatile in intra-day trading, but market players can’t seem to remember what has happened day to day. Sentimentrader, for example, cites the fact that breadth has had a net differential of more than 1000 for six out of the last seven days. Today for example, that differential was over 3000 on the plus side.
This volatility makes it very tough to draw any conclusions about where things might be headed, especially given the fact that this is options expiration week. The bears will say that the volatility shows increasing uncertainty and that a turn is near, while the bulls will respond that we keep bouncing back and this market remains strong.
Regardless, we aren’t convinced that the recent weakness is insignificant, and as a result, we are sticking with a short-term approach, anticipating further choppiness, and taking short-term trades where we can take them.
Interest rates will remain in focus as we move forward and the upcoming PPI and CPI reports should really stir things up. Our plan is to trade the news after the fact rather than try to make any bets ahead of it. Recent measures of inflation have been market friendly lately, and investors seem to be anticipating that to some degree.
Have a great evening, and we will see you tomorrow.
RevShark
Ebbnflow had a late change to
the EbbChart System
yesterday. I was a little late seeing it but I
was able to post it an hour before the deadline. I hope you saw
it. He
is making another move this morning. Read ebbnflow's recent commentary on the ebbchart page.
Trader Fred's
TSP
Trader System is out of the market this week,
but internally, the system is always peculating. Read
Fred's commentary on the
system
page.
The
TSP Talk Sentiment Survey system is 100% S fund
this week after a very close sentiment survey put it
back in the market this week. A new survey is
being taken today.
Are you bullish or bearish going into next week?
That's all I have for today. I am currently 100%
G fund. See you tomorrow.
|
China Watch
Shanghai Comp: 4,150.68
Recent High: 4,335.96
Resistance:
4,231.00 |
Today
-0.62%
as of 1:00
AM
ET |
Printer friendly