Thread: Market Talk / March 19 - 25

Spaf,

This looks like it could very easily be a Nov'05 repeat in the making, but my sense is there is something stronger on the horizon. There is a good floor under this market and I think it has been coiled tighter and tighter for the last two years. And when the energy is finally released it could look like March'03 or even Dec'1995. There appears to be plenty of bearishness around even with multi new all-time highs on multiple indexes - simply a classic case of bull market merchandizing - sorry we're closed for any new customers - we'll reopen in three months. I have more than several takeovers going on in my portfolio - but rather than waiting for final settlement I'm going to take the profits now and reinvest into other positions while they are still reasonably priced. Buy on the way up in a rip-roaring bull market.

Henry by the way is Henry To who is co-owner of Marketthoughts.com and a very knowledgeable fellow and writes a letter for private clients. He is a confident and firm believer in the case of the secular bear market. That's why he is predicting a "blow off " top and is short the market. That's why we are watching him to see how much pain he can absorb before he cries uncle.

Rod,

Amen to that brother. It's time for you to get back in - that way you don't risk neck strain from looking up - because it won't be long all you will see is the smoke stream. Take care

Dennis

I feel the same way, except about the I fund. The N^300 should rally soon and Europe will follow. That and the dollar shouldnt be a negative factor as it was last year. So bring it on Junichiro Koizumi, I'll take another 20-30% this year.

Nice rally last week! The contrarian indicators were shouting rally, but I was out of the market. My wife's account had some invested in the S&P, but she doesn't really care that my TA's said go to cash... Some of them got squeezed last week and some went long. Some investors on this board are doing excellent this year, compared to some of the Pro's I follow. However, these Pro's have the biggest loses when they short the market and they have been getting hammered all year.

As Birchtree says they are bleeding!!!

Current Status after last week:

1 50% shorting the Dow
1 75% long
1 80% long
1 25% long
3 100% Cash

As you can see most of the shorts are gone. They are still scratching their heads, and drinking lots of Pepto-Bismol this weekend.

The rally was again caused by the thinking the Fed is done, so interest sensitive stocks rallied taking the market higher. Is the Fed really done? I don't know if he is or not, but the market thinks he is and the market is always right. To make money you follow the trend, and last week the trend was up. In my opinion we are due a consolidation after the rally last week.

The first part of the week we could see a test 1300, but the money is still rolling in right now so we could also head higher. The concern is Technology. Will it catch up, or will the market go down. If techs catch up it will pull the market higher. We could easily go to 1350's or higher. The big concern is the institutional boyz.

Basically, it's the NASDAQ/Russell divergence: "The NASDAQ has become mainstream and is one of the divergence tools they use to "pull the plug" on a market rise. When the Russell's divergence gets to far apart on the NDX, they start selling or pairing down our market exposure" The technicals are indicating that we have such a divergence once again. The kind of divergence that described as a prelude to their institutional selling. That is why many TA's are still in cash are are waiting for this sell-off that just has not happened.

The smart/dumb money changed some after last weeks rally. Smart Money = 38% Dumb Money = 50%. I think the dumb money is making more gains this year than the smart money. The smart money might just be to smart for their own good. I'm really talking about computers and trading software, It's mostly black box trading these days.

I might add some longs next week if we get some consolidation Monday or Tuesday. After all, the TA's I'm paying are now mostly long.. HMMMM...
Contrarian indicator again? Maybe I should go short? NOT!!!

I'm going to play the QQQ's in my new Traditional IRA brokerage account with American Century. I'm not touching my Roths, they are tax free money. I think I can make the biggest gains in the QQQ's due to market swings. Or maybe the biggest loses!! I will considered some shorts when I go away in May. One of the TA's I pay invests in the QQQ's. He is currently down -13.5 % this year due to short covering loses, but was up over 40% last year.

I'm using my taxable accounts because I'm not as concerned about loses. Let's just say I'm having fun spending my kid's inheritance. We put this money away years ago for my son's college fund. But due to our current income level we have been paying cash for his college and left the money invested. So, spin the wheel; I'ts the QQQ's or bust. I really feel I can make money or I wouldn't do it.

I will be taking the advice of the guy at the link below in my new accout in trading the QQQ's. Check his web site out. Most of you have probably read one of his articles at SafeHaven. Another guy I follow commented on his web site recently he wished the TSP had the QQQ's to trade. He thinks Tech will shine again soon and he made over 20% on his TSP recommendations last year. He is worth listening to. http://www.marketlistener.com/index.php?page=Results

Birchtree,

What's your take on tech? Will it soon join the party? Also, Henry will send us a update this weekend. He needs to watch out for your Bullet Train my friend!!!!

Over the years I've been accumulating rust belt America and the various stocks that are associated with that theme. Steel, manufacturing, farm equipment, fertilizers, specialty chemicals, even super markets, oil service and drillers, basically all dull stuff. I own taiwan semiconductor, applied industrial technology, railroads, drugs, reits, motorola, and a few other techs. The technology sector may be required to accept more pain before it is fully flushed from most portfolios - I prefer auto parts over technology. But if they continue to lag I'll be more interested - I'm just a long term contrarian now as second nature.

If we get a good week I'm coming in both barrels blazing - there is so much I want to own - I need to buy more general electric, midas, steak and shake, bunge, brush wellman, tenneco automotive, advance auto parts, comstock resources, commercial metals, and even weismarkets. But I have to sacrifice something else to accomplish these purchases - I got 3 years to buy as much as I can. It all takes money. Take care

Man I am so bullish on America - we'll see what lead in Bernanke provides Monday evening if any. Regardless, the time has finally come. Liftoff!!!

Originally Posted by Birchtree

Rod,

It's time for you to get back in - that way you don't risk neck strain from looking up - because it won't be long all you will see is the smoke stream. Take care

Dennis

Oh, I'll be back in alright... after the selloff.

God Bless

Birchtree,

He is at it again! He is breaking the rules and talking about going to 75% again. Are you going to send the Bullet Train after him my friend!!!!

The Starship Birchtree is ready for lift-off.... I really want to put some Power Money to work, but not at these prices....

Have been watching for a while, and you guys have really helped me with your insight to the markets. I have been riding the I fund train, but don't know if it is going to rest for while or keep going. Long term I feel the I fund is the place to be. I have tried to time the I fund but feel this is risky. If it moves higher it's hard to catch up. In Feb. i sold the I fund @18.68 and bought it back @ 18.60 currently 100% I fund

Looks like the place to be for tomorrow at least. Australia, China, and Japan all solidly up tonight.

Dave
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After the breakout to the upside last week, it appears to be a new dealer, and a new game!

Originally Posted by Spaf

After the breakout to the upside last week, it appears to be a new dealer, and a new game!

Yeah....But have you ever noticed in Vegas that they change dealers right about the time you start winning?

Here's to hoping the current dealer has some stamina.