Bear Cave 2 (Bull Allowed)

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robo said:
Tom,

Buy a few shares of GDXJ for position trade...It will be a winner in my opinion in 2014.
Click to expand...
Thanks. I've got some nugt, although I'd prefer to short dust, but there are never any shares available to short at Scottrade.
 
Saturday, January 4, 2014


DID WE JUST SEE THE HIGHS FOR THE YEAR IN THE STOCK MARKET?


I believe we have now come to an inflection point, and I think the next 2 weeks have the potential to determine the economic direction in 2014.

Gold Scents
 
Contrarian Warning: One Sentiment Measure Is At 1987 Levels Of Bullishness

Jan. 3, 2014 4:40 PM ET | Includes: DIA, IWM, QQQ, SPY

Longtime option and sentiment trader Don Fishback passed these charts on to us. What they show is various long-term investor/advisor sentiment surveys from Investor's Intelligence, AAII, Hulbert and Consensus. The combined Bullish Sentiment by his measure is at the highest level since August 1987 (the market dropped 22% on 'Black Monday' in October 1987). See the charts below:

Contrarian Warning: One Sentiment Measure Is At 1987 Levels Of Bullishness - Seeking Alpha
 
The Bull/Bear debate based on the monthly averages of daily closes.




Secular Bull and Bear Markets

By Doug Short

January 2, 2014 (Monthly Update)


Historically, regression to trend often means overshooting to the other side. The latest monthly average of daily closes is 80% above trend after having fallen only 12% below trend in March of 2009. Previous bottoms were considerably further below trend.

This last bullet probably comes as a surprise to many people. The finance industry and media have conditioned us to view every dip as a buying opportunity. If we realize that bear markets have accounted for about 40% of the highlighted time frame, we can better understand the two massive selloffs of the 21st century.

Will the March 2009 bottom be different? Perhaps. But only time will tell.

Secular Bull and Bear Markets
 
A comment from Kaplan:

Update #1960: Friday early evening, January 3, 2014: Modest portfolios; bitcoin mania.

It is interesting to see how VIX has been behaving differently during the past several trading days than it had done for most of 2013. Last year, whenever there would be a mild drop for the S&P 500, VIX would suddenly surge higher as investors told themselves "that's it--the bear market is getting underway". Now, whenever we have a modest equity pullback, VIX is sluggish in moving higher. Investors are telling themselves, "I was fooled several times last year and wasn't aggressive enough. I'm not going to repeat that mistake in 2014--I'm going to consistently buy into dips because we're not possibly going to suffer a serious pullback for a long time." This is closely analogous to how the stock market behaved in 2008 as compared with 2007: investors became rapidly fearful into each 2007 retreat, whereas in 2008 they were astonishingly complacent each time we were set for the next slump. Look for an episode later in 2014, or less likely in early 2015, where VIX remains roughly flat or actually declines during a stock-market pullback as it had done in August 2008, to signal an upcoming acceleration of the general equity bear market.

True Contrarian
 
A Fearless Forecast from bluster at Traders -Talk......I say we shall see, but a bold call that's for sure!

Today, 09:13 AM Post #1


blustar


The market surprised traders by falling sharply on the first trading day of the year. The current cycle/wave forecast suggests "one more rally" left for the market before we slip into an intermediate term correction. I would not be surprised to see the S&P 500 cash index rally up into the 1857/58 zone by Tuesday this week, some 26 points higher than the Friday close. We are positioned for this expected rally. The next cycle low is due ideally on January 14, where we could see a 4-5% decline off next week's expected top. The Nasdaq could make its top on Wednesday.

Momentum and volume indicators continue to deteriorate markedly on each advance, but the weight of evidence continues to weigh in favor of the bulls. Like I said, this coming rally next week looks terminal on an intermediate term basis, and that being defined as a 10%+ correction over the next 2 months (March 11th?) before we see the final terminal rally to new highs into the 2nd quarter (early April), setting the stage for a huge bear market in the 45-50% range coming later this year.

Weekend Update - Traders-Talk.com
 
This week's comments from Mr. Hussman about this - overvalued, overbought, overbullish market.


January 6, 2014
Confidence Abounds

John P. Hussman, Ph.D.


The chart below shows the current position of the S&P 500. The light red line shows the log-periodic price trajectory that most closely approximates the present overvalued, overbought, overbullish, Fed-induced speculative run since 2010. While the initial gains from the 2009 low until about mid-2010 represented what we view as a move from reasonable valuation to full valuation (our stress-testing “miss” was not on valuation grounds), I expect little, if any of the market’s gains since 2010 to be retained by investors over the completion of this market cycle. Despite very short-run uncertainties about market direction, I should note that we now estimate negative prospective total returns for the S&P 500 on every horizon of less than 7 years.

Hussman Funds - Weekly Market Comment: Confidence Abounds - January 6, 2014
 
Birchtree said:
For crying out loud first sergeant you got my knees knocking now!!
Click to expand...

Birchtree,

Ha....I doubt that Big Bull, but it's time to think about some sector rotation, and to reduce your TSP account to under a 50% position. You can't buy weakness when you are all in.

It's also time to reduce all leverage if you have any on many sectors. We don't know for sure what will happen in the next few years, but all the Risk Management data I look at tells me it's time to reduce some long positions and to add to others.


I hope things are going well for you and your family.
 
A Slowing Auto Industry Could Be Another Warning.

Saturday, January 4, 1 o’clock.

Here we are in 2014, and as we’ve been saying, it is our expectation that 2014 will not be anything like 2013, that at some point during the year the market will experience a serious decline, quite possibly of bear market significance.

Sam Stovall, chief equity strategist at S&P Capital IQ; “This mid-term election year could end up being similar to prior mid-term election years. . . . I would tend to say that the market is headed for several declines of at least 5%, if not ten to twenty percent, sometime this year . . . . . . I would be careful of the 2nd and 3rd quarter, or that ‘sell in may’ period for the coming year.”


StreetSmartPost
 
I bought JNUG and NUGT in the pre-market for a trade.

1/6/2014 8:00:03 AM ET NUGT Bought NUGT @ $30.41 Executed

1/6/2014 7:48:50 AM ET JNUG Bought JNUG @ $18.31 Executed
 
Investors Literally "Worried Sick" About Stock Losses
01/06/2014 09:03 -0500



“People get stressed out and anxious and depressed when the stock market performs poorly,” Engelberg said in an interview after his presentation. “That may be very obvious, but I think this is the first paper to come along and try to take a good step at quantifying how big that is.”


The effect of a large market drop is twice as strong during periods of low volatility because “extreme returns are more surprising to investors,” Engelberg and Parsons concluded.

“Your expectations are set by what you experienced in the recent past,” Engelberg said in the interview. “If it wasn’t very bumpy and you see a big bump down today, that’s more likely to get you depressed or stressed or anxious than if you saw a lot of bumps in the past year.”

“When the market tanked, heart attack rates went up,” she said.


“A lot of behavioral finance is about how your mind affects markets and very little talks about the other way around,” Engelberg said in the interview. “We have evidence of causality coming from markets coming back to investor psychology, and that’s been a missing component in terms of empirical findings in a lot of prior research.”

Investors Literally "Worried Sick" About Stock Losses | Zero Hedge
 
Selling his book, but I agree with him......


Broad US Stock Market Update - No New Paradigm - Get Out Now!!


Conclusion - while the possibility exists of a final vertical meltup blowoff move, investors in the broad stockmarket should maintain awareness that this bullmarket is getting "long in the tooth" after almost 5 years of gains, and that risk is at generally unacceptable extreme levels. It is considered prudent to either sell existing holdings into strength or upon clear failure of the uptrend line shown on our 5-year chart for the S&P500 index. The proceeds may be invested in the now far safer and contra-cyclical Precious Metals sector, which is viewed as being in the late stages of a bottoming process, and where there are outstanding bargains to be had.

Broad US Stock Market Update - No New Paradigm - Get Out Now!! | Clive Maund | Safehaven.com
 
New Records in Bullish Stock Market Sentiment

January 6, 2014 | Author Pater Tenebrarum

Prices Are Not the Only Thing in Rarefied Air

Not only does the market write the news, it also manages to convince people that it is best to buy when prices are high and a really bad time to buy when they are low. At the March 2009 low, the daily sentiment index (DSI) of stock index futures traders reached 3% bulls – a record low. Bears exceeded bulls comfortably in numerous surveys, such as the II market newsletter writer poll. Not surprisingly, it turned out to be the best time to buy since the low of July 2002.

Today the exact opposite situation obtains in every respect. Not only are prices higher than ever before – so is the bullish consensus. We didn't think it possible that this would happen, but in several measures the consensus has turned even more bullish in the final weeks of 2013 than it was at the peak of the Nasdaq bubble in early 2000. At the same time however, declining breadth momentum continues to be in evidence:

New Records in Bullish Stock Market Sentiment |
 
I wish the gap would get filled, and I'd be a buyer as long as the bottom of the gap holds. Gaps get filled and as long as it's open we'd be looking over our shoulder. :)
 
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