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amoeba's Account Talk
- Thread starter amoeba
- Start date
Notwithstanding the upside gap last Thursday, I find it's Holiday week timing and low volume suspicious. So, no chance I will chase it. Rather, I expect at least one and probably more big down days over the next 5-7 to take it all back. The modest jobs # miss (within noise) could portend a further rate cut, which would be stimulative, but I don't think that the FED will do it. Overall, I anticipate the remainder of this September to be choppy at best and end up slightly negative. I agree with Coolhand that sentiment is less predictive than it used to be, which I attribute to the proliferation of hedge instruments. Doesn't mean I won't make a play this month...but will choose a more obvious opportunity. I don't see one at current prices....so I'll wait to see if the 50 EMAs hold in the near term...and go from there.
With the 50 EMAs holding for 4-5 days, together with today's tweet about delaying some tariffs due 10/1, and the neutral sentiment number this morning (30's across the board, bears, bulls, neuts) I made a play of about 50% equities COB today....how long this move will continue, if it does at all - - - is a toss-up...if there's a reversal to a downdraft, I will get killed - but not as badly as if I was 100% in.
This was not the obvious opportunity I was looking for, but I did want to make a play, and have another one in mind later in the month; if F-fund continues to undershoot.
No point being coy...money is flying out of bonds and bond ETFs...the FED meets next Wednesday, and is expected to announce another (completely unwarranted, IMO) rate cut. If Powell then provides guidance in his remarks of yet another cut this year, a 2+% bottlerocket equity move is a lock. He may not do that, I wouldn't, but I'm not FED chairman. I see momentum in this latest stock and bond move anyways, and don't expect it to reverse on a dime. All aboard!
Well, one of the key factors I watch coming off a volatlity period is the VIX 50EMA, which was breached yesterday. When this happens, it often signals pending declines EXCEPT, when it is only a few weeks removed from the peak...which it was. Under this circumstance, there's a decent chance the 50EMA is recaptured the day after. That's what appears to be happening, again, today. Watch VIX 16.1 near the close to see if it stays under that...if so...ALL ABOARD!
VIX lost it's 50EMA, and has stayed above it since my last post, contrary to what I expected. Today, SPY deadcatted a bounce midway through its recent 2850-2950 range. I think its a head fake, and markets will fall sharply on a jobs# miss this Friday. But not sure...reduced to 25% equities this last day of the month. Really got clobbered this September, but not for trying. IMO no one should trade on impeachment headlines which are headed, much sooner than most think, for the inevitable same result as that collusion investigation.
Reduced TSP to Zero equities, 90G, 10F. Expecting a huge drop after a job# slight miss. Nothing good here. Tried some knife catching trades in my Roth...got stopped out in 20 minutes with a 1% loss which would've been more if I held. I am determined not to go negative this year...as much as I IFT, I'm about ready to throw in the towel on this year and be happy with 6%.
And so it twas, dropping sharply to 2,870, which is holding for now ....should float there till Friday's BOL report....but remember last year....was that dark or what? In addition to jobs and any revisions, I will watch for potential extremes in sentiment and volume...this last year has shown either can continue in the extreme for weeks, so one number is not necessarily a buy. Anymore.
Anyone hoping for a dead cat bounce, consider that most like you will likely sell into it, and the volume isn't there (100mm SPY traded, when the recent max, last December or so, was 260+ mm), so I don't think it will happen, and I don't think this is any kind of bottom. I'll stick with my earlier (as in a month or so ago) prediction of somewhere in the neighborhood of SPY 2,600. That should clear out the suckers and weak hands.......maybe stimulate some production out of trade talks instead of just more talk. This further unwinding could take some time - - - a few more weeks of chop with the EMAs being recaptured and then refailing. This impeachment insanity shouldn't matter but won't help if it continues.
1965Vintage
Member
I wouldn't touch this market with a 10 foot pole.
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Sent from my moto z3 using TSP Talk Forums mobile app
Thus far, it's following the usual pattern of measures, countermeasures, and testing of such by pre-announcements without details...trade talks currently breaking down...apparently headed towards additional (already announced) tariffs to kick in 10/15; looking more likely to happen. Seems like a deal is still partially baked into today's (lower) prices. Tough call, but at this moment, I'm sticking with sitting on my hands (and my last IFT) till at least Monday.
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