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Thread: Bullitt's Account Talk

  1. #1

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    Default Re: The Marathon Man

    I still say that the sell off yesterday was more of a technical sell off. Once the S&P hit 1525+ level, things fell apart quickly. The professionals unloaded their shares and locked in profits while rushing to an early start on this holiday weekend. Greenspan's comments were still lurking in people's minds as well. Also, the individual investors either fear taking money into the long weekend or are looking to take in profits.

    People who took up short positions during yesterday's sell off quickly covered when the market gapped up. Moving averages are still positive, no need to think this market is heading south as of yet. This market is growing faster than the analysts predicted and now they don't know what to do. Everyone wants to be in this bull rally but missed the last pull back so now they are forced to buy on any significant dip they can find.


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  3. #2

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    Default Re: The Marathon Man

    There is no reason for anyone invested in the US market to lose sleep when it comes to a 401K plan. Yet another fear driven sell off thwarted by the buyers. There probably were alot of folks who got short early on and just got run over right out of the gate causing a sqeeze later on. I overheard someone talking about getting into the ETF symbol 'QID' once China sells off. Haha.

    The beauty of the bears is that there is no such thing as a pullback, no matter what they preach. Any weakness in the market and they cheer and high five about how right they were while their friends lose money. Then, when the bulls are buying on weakness, the bears are left on the sidelines trying to find an entry to get short only to get slammed again.

    Advance/Decline and other indicators are all secondary to Market Volume. SPX has had rising volume and above average Volume today which confirms the strength of this rally.

    Still long and still staying away from the F fund.

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  5. #3

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    Default Once Again

    Once Again.....

    The sell off did not come. Forget about China. Americans couldn't even invest in China if they wanted to. At best you can get into FXI, an ETF covering China, or a few stocks. For the most part though it's off limits to foreigners. One of these days that market is going to crash in Enron esque fashion but we won't find out immediately because the communist nation is going to go to any means to cover up the crash.

    Moving ahead, this is the 3rd time China has had a selloff in almost as many months. We haven't been affected by any of them. The first one which resulted in a correction to US markets was a great buying opportunity. In the past two, investors all jumped onto what they thought was going to be a great buying opportunity in the US with the China pullback. Turned out everyone had the same idea and it turned into a higher high for the markets both days.

    Great days to be long. Bad days to be in the F Fund. F Fund has turned to the downside. Scalpers can make money on the downside, not 401K plans. I do like people in the G Fund though since they will jump in on any weakness in the coming weeks. Contrary to popular belief, this run has nothing in common with the crash of 29 or 2000 bubble. No sense in even comparing the two. I mean, how can anyone sit this run out and not feel like they are missing something?

    Still Long in a Short Way

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  7. #4

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    Default Re: Bullitt's Account Talk

    Good chance of profit taking today after the recent run up. Profit taking is not a bad thing because any gains are nothing until you ring the register on them.
    I'm going to take any weakness today as a positive for two reasons.

    1. Pretty sure today is the day my TSP Contribution buys shares, and I'm all about buying on a down day.
    2. Market has had a run of days up and it could use a little shakeout in order to commit more buyers to the stampede (and trap a few more shorts.)

    I read in the WSJ that the short interest in Small cap funds amounts to $19 Billion, or 114% or total assets in category. (I don't really understand how that's possible but worth noting.) Surprisingly, International Funds have a short interest of only 6%. I would think it would be the other way around. I wonder what the short interest is in FXI (China ETF)? I guess that short interest is a contrarian indicator so think opposite. Anyway, The S Fund does have some exposure to small caps as we all know so there is a possibility of this fund breaking away as the shorts get pummeled.

    By the way, when does everyone else's TSP Account buy shares? Like I said, I'm almost certain it is every other Tuesday for me.

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  9. #5

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    Default Re: Bullitt's Account Talk

    Friday for me.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  11. #6

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    Default Re: Bullitt's Account Talk

    Quote Originally Posted by Bullitt View Post
    By the way, when does everyone else's TSP Account buy shares? Like I said, I'm almost certain it is every other Tuesday for me.
    I think i buy mine COB Tuesday as well.
    Weatherweenie's Account Talk
    Teddy Roosevelt: Patriotism means to stand by the country. It does not mean to stand by the president or any other public official. Expected retirement date: November 2023

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  13. #7

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    Default Re: Bullitt's Account Talk

    Definitely time to err to the side of caution. It seems that the recent week's action may turn the tide on this market. Volume action has not been promising the past few days which caused us to chalk up a few more distribution days. That brings the count to 5 for DJIA, at least 5 for the COMPQ, and 5 in the SPX for the past 3 weeks. A series of 4-5 distribution days over a 2-3 week period is enough to warrant a possible reversal.

    I'm not convinced this downturn is over. I know this sounds like a totally opposite opinion I had compared to last week, but things can go south in a hurry. Looks like alot of amateur types took up short positions Thursday night (and paid out of their nose for options contracts) but when the market seemed to be trending up some on Friday, the short squeeze was on. Nobody wanted to hold on to that short position over the weekend. (How can anyone every short a rising market anyway?)

    I will not be convinced that this market can shake off this selloff until we finish above 1517 in spx on high volume. We've also got that negative divergence among all three indexes in MACD and RSI that seemed to be making a turn to the upside early this week but has continued downward in recent action.

    As for the comment that we will see 6.5% treasury yield in 2 years or whatever, I'm sure he's not the first one to think so. Since July 2003 the 10 Yr has been in a strong uptrend. If this uptrend continues along the trendline, 5%+ is a reality come next year this time. Once again, someone speaks the obvious and everyone panics.

    I'm still a Bull, but ready for further weakness. As this rally wears on, a correction seems more and more like the right thing.

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  15. #8

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    Default Re: Bullitt's Account Talk

    Options expiration week and looks like once again a short squeeze went into effect and drove prices up. The Bears that got short chickened out after the retail sales report and beige book were released. I'm not one to brag about my successes and enjoy watching others lose, but when it comes to people who short the US markets it's a different story. I think it's the greatest thing in investing when prices drive up and pummel anyone holding puts. Short that FXI or Zimbabwe market, not the US market. We're going to have our ups and downs, but that thing that happened in 2000 was an extreme.

    Anyway, the 50 DMA is still trending up in SPY, DIA and QQQQ which shows that this market hasn't turned to the downside yet. The 5th-7th selloff may have been triggered and fueled by the folks who were invested with the notion that an interest rate decrease would come about. Today's action proved that the economy is still growing but could lead to a rise in interest rates. I think we've totally squashed any chance for a decrease in rates and by now the pros have already priced that idea into stocks.

    Big day Thursday and with options expiring Friday, we could see another strong short squeeze on Bullish news. Shorts will want to liquidate on fear ASAP. I DCA'd on Mon and but still have most in G. A big volume move up will have me looking for another entry point. It's just too hard for me to take a pitch when it's the pitch I'm looking for.

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  17. #9

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    Default Re: Bullitt's Account Talk

    Today is looking like a good day to buy just about anything. Yesterday's action had small losses on lower volume. The consolidation on low volume is important because it means that the one's we call the 'big boys' weren't selling. They were simply buying up shares on weakness that retail investors were willing to give up. They'd only grab a bit here and there though because they know that if they get greedy and soak up too many shares it will drive the price up and give their game away.

    I'm so tired of hearing about this housing market. People aren't buying houses like mad anymore, handle it. Everyone had to have seen it coming since I can turn on the TV at any given time and see a show like, "This Old House", or "Flip that House", or "Sell My House". Once everyone is on the bandwagon it's time to get off. The masses are finally starting to realize that a house is one of the worst 'investments' one could ever make. But, like a car, try to make it thru life without one.

    Oh, I DCA'd the rest of my 401K back into equities on yesterday's weakness. Like I said, if I get the pitch I'm looking for, I'm going to dig in and drive it.


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  19. #10

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    Default Re: Bullitt's Account Talk

    Still in a confirmed rally despite the recent distribution. What a great shakeout this week! The weak dumped their holdings on fear while the market drew lower. This caused stop loss triggers all over the board. Why is this good? Do you really think those people are going to want to be on the sidelines next week when the Fed says there will be no rate increase and gives positive forward guidance? No way.

    So why was there an increase in selling/volatility this past week?
    For one thing, the lemmings jumped off the cliff after it was made public that a Bear Sterns Hedge Fund owes $145 million in margin calls on subprime bets. First BS says it's not going to bail the fund out but on 6/22 they announced a $3.2 Billion loan for the fund to repay it's debts. We've known for a few months now that the subprime was a mess, why do we act like it is news? If another hedge fund begins dumping mass amounts of financial holdings it could drive down the price of stocks in general. IE: Fear based selling.

    The next reason for the volatility is profit taking before the quarter winds down. The market is at it's highs and the Smart Money is cashing out on weak holdings and increasing positions in the strong companies. There was all this talk about 'What stocks are going to be entered into the Russell 2000 during rebalancing so I know which ones to buy?', last week but people seemed to have forgotted that as well. The Russell was rebalanced Friday, which has a larger impact on the Nasdaq than any other index. The spike in volume was attributed to the rebalancing. In other words, dumb money following the lemmings while smart money gathers up shares of the newly balanced index on weakness. Every Index Fund, Mutual Fund, Etc Fund that mimcs the Russell 2000 had to do some yardwork Friday. There is a great deal of 'pin action' that comes with this rebalancing as well.

    The other reason for the volatility is the upcoming Fed meetings on Tues and Wed. All that us Bulls need is the confirmation of keeping the rates at 5.25% and that we are contining on in a Goldilocks environment.

    The market could still use another quick shakeout followed by a rebound in order to squeeze out more of the shorts next week. Short interest jumped 6.1% since May on the NYSE. Double Tops can not be called a Double Top until it takes out support. Just because a Stock/Index hits a prior high and stalls does not mean it's a double top. Could it lead to one, sure, but it's not a signal that the market is going lower until support is broken. Market signals are just signals until after the fact when there is confirmation. There were a few calls for a double top in mid April and Sept 06.

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  21. #11

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    Default Re: Bullitt's Account Talk

    Glad to see you on the board - I like your tone.

    The short interest ratio is now at 8.0. The last time the SPX was over 1500 was in 2000, and at that time short sellers were few and far between and missed the top - they are now ready for the crash. There has been a 30% increase in short interest in just 4 months. Is the end of time approaching - I think not. Shake'em up a little why don't ya.

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  23. #12

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    Default Re: Bullitt's Account Talk

    Long and Strong. I know the technical indicators have had a divergence for a while now, but at the end of the day the ONLY thing that matters is price. Price is what makes us money. NYAD, MACD, RSI only matter to technicians. Should be some short covering into fear the next few days. I'm riding this Bull hard until it implodes at Dow 14K. Not even the Mary Celeste Omen could prevent me from participating in this opportunity.

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