Bullitt's Account Talk

[Bullitt]

I've begun planning an exit strategy at this juncture of lightening up on equities periodically in the weeks/months ahead. I'm thinking this rally here is a just the market makers showing the folks who recently learned about bear funds, a lesson in the school of hard knocks. Hmm, I thought I kept hearing everyone say that the H&S pattern was too obvious? Well, somebody sold short at the break and rushed to cover today.

If we continue to move higher without a continuing correction towards 850, I'll for sure begin lightening up around the 950-1000's because that would be the final blow off top of the rally. I don't see it playing out like that, but who knows? I sure don't. However, I'm pretty sure the market will disappoint the ones who bought things such as INTC, CSCO and QQQQ today in hopes of a continuation of the rally, because we all know, insiders only buy when the price is low and insiders always get their way. I do think that once we get through this consolidation, we're going to make new highs over 1000 by year end, but it's better to be early than late when getting out.

Inflation is surely in the cards. Something to think about.

Pacific Investment Management Co.’s Paul McCulley said the Federal Reserve should push inflation above its long-term target to coax consumers to spend money if the U.S. economy stays mired in recession.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akpxGSwUoMuA

This is just how I'm playing the market in the next few months. Remember, for every buyer, there's a seller.

 

[Steadygain]

I think you're right on target !!

In the short run I'm hoping for a really good GAIN

Over the long run I expect huge volitility to continue and will continue the exit - enter game.

It's good to hear from you again. Hope things are going well.

 

[Birchtree]

A little inflation with rising interest rates has always been good for the market because they denote an improving economy with stronger earnings. As soon as you get off the tracks I'll move on by. Is panic buying going to show up tomorrow pushing the SPX back to 956? I wouldn't be surprised.

 

[Bullitt]

IFT today. Put 20% into the G Fund but kept the diversified allocation. I still think we're heading at least 100 points higher in the S&P 500 in the coming weeks/months. If the S&P drops below 800 (since many chartists are calling it to drop to around 810, they are destined to be wrong) I will redeploy the money from cash. Otherwise, it may be there for a looong time depending on how the F Fund wants to cooperate. We'll see how it goes.

Looks to be a lot of folks who are aggravated because the market didn't do what it was supposed to after a H&S break. I'd say there were more closet bears out there than originally printed because nearly every blogger site I checked said the H&S pattern was a bear trap. They were right in the short term, and it may drop again, but somebody got hit with margin calls and it wasn't me. If hedging worked, hedge funds wouldn't have closed in the droves this past year.

 

[Steadygain]

I still think we're heading at least 100 points higher in the S&P 500 in the coming weeks/months. If the S&P drops below 800 (since many chartists are calling it to drop to around 810, they are destined to be wrong)



Looks to be a lot of folks who are aggravated because the market didn't do what it was supposed to after a H&S break. I'd say there were more closet bears out there than originally printed because nearly every blogger site I checked said the H&S pattern was a bear trap.

Have I told you lately that I love you !!

Well I do man - but it's cool so relax

 

[Bullitt]

We're going to get a pullback here soon. That's just how wall street works. Market Makers will find some way to dump it a bit and where we go from there is anyone's guess. If we're going to get any chartists on board like everyone seems to be looking for this week, the boys are going to have to make a run at the 2009 highs on big volume in order to chew through those sell stops on SDS type investments up around 955.

As long as economists keep pumping how the recession is over, maybe more money will trickle in. I'm not too concerned about day to day, but Tuesday's earnings should be interesting. The doom and gloomers missed pretty bad on earnings so far and at the end of the day, earnings are the driver of stock prices.

Folks.... Hedge Funds and 'Smart Money' don't make buy and sell decisions based off of CNBC. Actually, yes they do. When they tell Joe Public that the recession is over, they're doing a thing called the Kansas City Shuffle. You look left, they go right.

 

[Bullitt]

It appears the TSP Talk Sentiment is flashing a sell even with new bull market rules in place. I'm planning on a good flush out drop soon of around 10%, but not an end to this run. It would be simply a correction to this big move, nothing more, nothing less. Too much bullishness and at this point you're either a weak hand or strong hand. Strong hands can afford to watch the market go down 10% while weak hands who just piled in are going to have a tough time holding on when the market breaks 920 because it will be instant negative feedback and the sell orders will begin to come in when the news can no longer spin the negative outlook. 950 is too obvious a support line, so I'm looking at 870 as the next launching point.

In continuation of my exit strategy, I set a few sell limits on some stocks I own before the open yesterday which did eventually hit midday. Nothing more than selling some overvalued holdings into strength. The market does appear to be showing some signs of distribution here so I'm going to say, for what it's worth, that we make a few prods at a higher high and then comes the correction. Maybe two more distribution days would do it.

 

[coolhand]

It appears the TSP Talk Sentiment is flashing a sell even with new bull market rules in place. I'm planning on a good flush out drop soon of around 10%, but not an end to this run. It would be simply a correction to this big move, nothing more, nothing less. Too much bullishness and at this point you're either a weak hand or strong hand. Strong hands can afford to watch the market go down 10% while weak hands who just piled in are going to have a tough time holding on when the market breaks 920 because it will be instant negative feedback and the sell orders will begin to come in when the news can no longer spin the negative outlook. 950 is too obvious a support line, so I'm looking at 870 as the next launching point.

In continuation of my exit strategy, I set a few sell limits on some stocks I own before the open yesterday which did eventually hit midday. Nothing more than selling some overvalued holdings into strength. The market does appear to be showing some signs of distribution here so I'm going to say, for what it's worth, that we make a few prods at a higher high and then comes the correction. Maybe two more distribution days would do it.

Thanks for your insight. It helps others decide what their strategy might be moving forward.

I'm looking for at least one last push higher before a "possible" correction. If it wasn't for the underlying strength this market has shown, we might not get another rally to sell in to. But in this market it's a definite possibility. But that's putting the cart before the horse.

 

[Bullitt]

Doesn't look like volume is coming in as scary as it may seem for this kind of gap down. In fact, Friday's was pretty weak, not even qualifying as a distribution day. Probably just nothing more than the purging of weak hands is what we're beginning to witness here today. I'm not saying that it takes a Birchtree to be a strong hand, but you're definitely a stronger hand if you had bought in sometime around the July low or lower than if you had bought in during the alleged bullish break of 1000 SPX. I'm still prepared for the ensuing 10% or so drop but I'm not going to play the in and out game with TSP or any other accounts for that matter. I did lighten up a few weeks ago in TSP and also unloaded a few stocks recently that had some gains over the past few months in my personal account, but that has been the plan all along.

A few thoughts:
1. I'm not smart enough to get out at the top and get back in at the bottom. (And no, even if we had unlimited intra-day trades as some feel we should, I still wouldn't be smart enough to time this correction.)
2. The bad news will probably be even worse when the market turns again after this correction. There won't be a green light or a bell at the turn telling me to get back in.
3. I'll probably be working and not be able to even check on the markets when it does turn, so I'll probably miss the opportunity even if I could time it.
4. I'm not even totally sure that the market is going to correct 10%. It might be 8%, it might be 18%.
5. The market is never going to reward the majority of investors.

We're working off not only the bullish sentiment (the sentiment tracker did indicate a sell this week), but the overbought conditions as well.

 

[JTH]

I feel the same way. I'm getting tired of trying to time my TSP and my ROTH, and getting my azz handed to my as a result. After my -70% Faz fiasco, I'm adopting a longer-term strategy.

As for $SPX, I'm looking for a bounce off 880, that's only 100 points away ​

 

[Bullitt]

Looks like we got our distribution days. LOL. See you at 880 JTH!

http://www.tsptalk.com/mb/showpost.php?p=228199&postcount=1684

 

[CountryBoy]

I feel the same way. I'm getting tired of trying to time my TSP and my ROTH, and getting my azz handed to my as a result. After my -70% Faz fiasco, I'm adopting a longer-term strategy.

As for $SPX, I'm looking for a bounce off 880, that's only 100 points away ​

I'm not even trying to time mine and my wife's ROTH purchases. I'm buying 90% for Divvies and buying those stocks based on my current average DCA share price and a little of what they market may be saying, but very little, since the Feds have screwed up the market by artificially introducing money. That's my main guide. Then, I have 3 stocks I buy and sell as they go up and down.

Good Luck all,
CB

 

[Bullitt]

IFT today. Again, part of my selling strength strategy here. Putting another 15% into cash to make my allocation:

35 G
35 C
15 S
15 I

I still do not believe the rally is over. Whether this past little drop was the pause that refreshes or not I have no idea. Bull runs can maintain an overbought market and the more it stays overbought, the more panic buying that ensues. We've seen panic buying on an unprecedented scale the past few months and there's probably still more to come. I suspect many indicators are getting blasted because the market was so overbought, it only took a few ticks down to change the momentum to trends amongst models.

In my past post I said I wasn't smart enough to play every little up and down and I still feel the same way. I think too many TSP'ers have an unrealistic goal of being in the market every up day and out of the market every down day, which causes unnecessary IFT's and spinning of the wheels. It's all about catching the big moves.

There's a lot of propaganda out there telling us rear view mirror history, but obviously there are still folks who are waiting for any little bit of weakness to get back into the market after selling out in May. With OPEX today I'm expecting a squeeze after the bear trap that developed the past week. Plenty of investors were looking to play that 3X bear fund game again and will be hammered once again.

Some folks say it's the garbage stocks leading the rally, but most tend to believe the banks need to lead. Last night the $BKX broke out of a descending wedge pattern to the upside.

So, if I believe we're heading higher, why am I lightening up? The higher we go towards 1100-1200, the higher the risk/reward.Going forward, my plan is to dump some more into G Fund after the next 30-50 points.

 

[fedgolfer]

http://finance.yahoo.com/banking-bu...-tips.html?sec=topStories&pos=6&asset=&ccode=

Bullitt, if GS has trading huddles to give the best info to the best clients don't you think that info finds its way to the the PPT? Doesn't sound good for permabears.

 

[Bullitt]

My first impression when I read the headline about GS front running it's upgrades/downgrades to a select few was, "Here we go again, where's the SEC?". As I read that article I became agitated that GS is probably making more money using this huddle idea to generate volume in their flash trading programs than anything else. I mean, a stock tip is a stock tip, great. If you can get information on a stock upgrade or downgrade before it happens (which always does happen) it doesn't necessarily mean big bucks on a day trade or even a long term trade. How many times are stocks upgraded and never go up more than a few decimal places the next few days? It is frustrating that firms are making money with this flash trade system, but soon enough everybody will have it and the whole idea will collapse, just like everything else that becomes mainstream.

As for the PPT, I don't believe that a PPT exists within our Gov't because the market cannot be manipulated with so many players worldwide. It can however, stay irrational, overbought or oversold for extended periods of time and I think frustrated traders use the PPT as an excuse as to why they lost or why gold isn't at $5,000 yet. (Anyone who plays sports knows it's like the guy who says, "Yeah, I coulda done that, but I had bad knees in high school." LOL)

I do wonder though, how many Dollars are coming back home in the form of US T-Bills purchases with those billions we lent to Europe over the past year?

 

[Bullitt]

Oh, I forgot... Love or hate GS, don't forget that with Bear Sterns & Lehman gone and with Morgan Stanley on the brink, they've really put themselves in a position to the be given the title of starting quarterback on the field when it comes to market calls.

 

[fedgolfer]

with the Fed backing its bad investments, having easy access to the Treasury, it is the United States of Goldman Sachs. It's like that Rollerball movie... corporations become countries. Geithner & Bernanke are just bag-men in suits and fancy titles

 

[Silverbird]

Hardly a corporation. Just big Finance. They don't make anything.:toung:

 

[Birchtree]

Either way you better not stand in front of this train unless you can run like the wind. There is more volatile rocket fuel headed into the market and this thing could easily explode and you certainly don't want to stand in the way - unless of course a little pain is pleasant. Today is day 6 of 6 to the upside - if we hold to positive momentum it could be 10 of 10 by the end of the month.

 

[poolman]

Either way you better not stand in front of this train unless you can run like the wind. There is more volatile rocket fuel headed into the market and this thing could easily explode and you certainly don't want to stand in the way - unless of course a little pain is pleasant. Today is day 6 of 6 to the upside - if we hold to positive momentum it could be 10 of 10 by the end of the month.

To Tell you the Truth Birch I would love to see that but in my oppionion I don't think the Power is there. We will see though.