Bullitt's Account Talk

[Birchtree]

China only wants to rachet down to an 8% GDP from 10% - there is still plenty of growth there. Watch the commodity markets flourish in the next month. Exports from the EU will pour into China and India. The global economy is fine - we as an economy are fine. Goldilocks is back and this slower growth will push the market to higher highs.

 

[Bullitt]

I know how much this MB heralds bulls and shuns bears, but I do hope that my efforts to inform the masses of reality do not fall on deaf ears as I have been quite bearish for the past 4 months.

A wake up call for the followers, dreamers, believers and wanna-be'ers- With Shanghai market down 27% from it's most recent high, China is in a bear market. How, oh how will we keep moving forward when the ultra super growth power of the universe is in a bear market?

Another commodity laden country, Brazil, has completed a double top, so lower commodities are in the works. But then again, lower commodities equal less demand equal less fuel for growth equals watch out below. What did the crash in oil prices do for world economy in 2008? Nothing. Oh, wait, it made things worse because pension and hedge funds were forced to unwind their futures positions.

Goldilocks? (I just spit out my drink) Are we talking about parallel worlds here?

 

[Birchtree]

Well Corepuncher 2 this correction is acceptable in a continuing bull market - and now that sentiment has reversed we should be ready to regain the upward momentum. Pull backs are just a natural part of how the market works its way higher. The more nonbelievers the happier the bull. Remember that bull markets do not like company, the market will do everything it can and I mean everything to make the majority of players like hedge fund managers gun shy and keep the bears likeyourself from recognizing the prevailing trend.

 

[crws]

So hit me with your best shot - fire away.

 

[crws]

PS- :laugh:

 

[Bullitt]

CRWS, the problem with your performance chart is that doesn't take any additional contributions into account. It's a flawed chart and misleading chart.

 

[crws]

True, cut right off tsp.gov- and actually the S is closer to 4.5% as far as I can figure- however my point was more to the fact that for the last 10 years in "buy and hold" terms, where you aren't watching the market like a hawk, your return in the highest risk/reward vehicle barely (if even really) would have got you what the G fund did.
I think this became symptomatic of the boom or bust mentality when the dot.com era spawned widespread trading, which continues in enhanced form today, with little regard to actual data or justification of market valuation.
I have about 10 years of contributions left, and if it were to continue at this rate, without constant attention, even hedged as much in TSP possiblities, I might just keep ahead of inflation. Therefore to essentially gamble on market dynamics during a period of uncertain direction and marginal fundementals in the big picture of the world economy makes me suspicious of the mentality, in this case the institutional traders with reams of data at their disposal, able to manipulate the markets at will, as evidenced by Banks' recent string of profitable trading days.
Call me dated, but I prefer to see more than 1 qtr of fundamentals and the market in progress, not just to a peak and back as it seems to be doing now.
I think the article about the market getting ahead of the recovery is quite fitting, the 10% unemployed aren't putting any $$ in the system to justify long term growth projections and maintaining housing values where 1/5 are either underwater or deliquent, and for me, that alone is enough to raise a healthy dose of skepticsm for a raging bull market.
I know the housing #s came out today, but there is also this from the 19th-
http://news.yahoo.com/s/ap/20100519/ap_on_bi_ge/us_home_foreclosures

My 2c

 

[Bullitt]

We all understood your message CRWS, no need to explain. The buy and hold vs trading thing has been kicked around many a times on this MB.

You're not alone when it comes to being concerned about the next ten years since you obviously don't live in a dream world of forced inflation and bailouts.

 

[Birchtree]

Remember intelligent members have the option of dollar cost averaging into their accounts at lower prices buying more shares for the future. DCA is the redeemer of all portfolios especially as a disciplined strategy. Put allocations into the funds that are undervalued and eventually they will shine and the retirement balance will grow.

 

[KevinD]

I'm gonna get shook out before next pay day...

 

[Birchtree]

I bought some BP today at $45.46 - not the exact bottom but close enough for government work. I think I need to add to my STO position real soon.

 

[Bullitt]

I bought some BP today at $45.46

Nice touch. I wouldn't mind buying some but will they keep the dividend at 7%? I say odds favor a dividend cut in the future, but even if they cut it in half it's still over 3%.

 

[Bullitt]

Went 50% into equities before the noon deadline today. Indicators look like we could rally here even though I am still a bear. Maybe we'll get a good rally here of about 10%, but don't bank on a mirror image of what happened in Summer of 2007. I did not factor tomorrow's jobs report whatsoever into my decision and even if anybody knows the number, they don't know how the market will react until 1600 hours.

On the bullish front, Nasdaq broke the downtrend line and McOsc went above the zero line today. Overall, volume is still horrible, but that should be expected in the beautiful summer months. Up Volume-Down Volume ratio is strong, but if this push doesn't move the market up substantially to get some short covering, we will really come down hard. ISEE is bullish (which means the little guy is shorting this market) and PC ratios are looking about as bullish as they probably can in this euphoric mess.

Long term I am still very bearish but I can't let that opinion get in the way of a perceived opportunity.

 

[CountryBoy]

Good Luck Bullitt,

I've just been sitting in G, since I've been dealing with contractors on a new Heating and AC system, so I've been pre-occupied and with the way the market's been acting, I've probably kept myself outta trouble.

Get this contractor behind me and maybe the market will be acting better, yeah right. :nuts:

I hope you and yours are doing well.

CB

 

[Bullitt]

Well that was a nice one huh? I had a bad feeling when I saw futures dumped some 60 points in the DJIA in a matter of one or two minutes at around 0630 and never came back. The number probably leaked but who cares, what's done is done. Our leaders pumped this thing like we were going to have a blowout number, but even wall street recognized the sleight of hand trick this time.

Still in the trading range and haven't hit support yet, but things will get ugly very fast if we gap down 20 on SPX Monday. The failure of this market to bounce out of oversold conditions is not good. With all the overhead resistance to fight through (probably from buyers during the flash crash) we still have a lot of stuck bulls to chew through if it's going higher. The declining wedge along with the 200 DMA denied any attempt at an uptrend. Today was the biggest volume we've had since the hammer formation in late May and most oscillators lie in dangerous oversold territory. The lead dog, Shanghai/China, is in a confirmed bear market as are most foreign markets. Canada tightening is not good either.

For as bearish as I am, I just can't believe we'll go from the highs into crash territory without a few frustrating bounces to keep short sellers nervous at night. Within one of those bounces, I was intending to unload the 50% long position. I guess the breakout of the down trend in the Nasdaq 100 was nothing more than a head fake or bull trap even though the P/C's look like they are turning more bullish after today's rout. ISEE is still coming in at a bullish reading.

I don't know what I will do with the 50% G Fund right now. Average down- maybe, bail maybe, I don't know.

Reality finally hit the markets today and it's time for any long term buy and holders to batten down the hatches. When one stock, Citigroup, can account for 20% of the volume in a batch of 500 stocks, something is direly wrong with the system.

 

[tsptalk]

I kept waiting the the mid-day rally, but the decline was steady. We are at the bottom of the May 6th trading range again, and I agree that if we open down sharply Monday and cannot close back above today's close, we could be in for trouble. But historically, things reverse quickly after a jobs report sell-off. Wishful thinking.

 

[Bullitt]

But historically, things reverse quickly after a jobs report sell-off. Wishful thinking.

I hate to hope in this game, but according to Jason:

This could be first-ever gap of -2% on payroll day. Of 13 times it gapped -1% or worse, S&P was 11/13 up into Monday's open.

Caveat: .01% could constitute an up day. We need about 6% to breakout.

What worries me in the ST/IT is the McOsc unable to break out of oversold conditions and failed break out of the Nasdaq 100. I've got one leg stuck in the bull trap.

The long term indicators are all bearish. Most majors, including "ultra super growth power engine of the galaxy" China, are in bear markets with 50/200 crosses. I'm under the opinion that Dow Theory gave a sell when DJTA broke 4250. Also, I think this is the longest the 20 DMA has stayed below the 50 DMA in the majors since March. We need to get out of oversold, and we we need to do it fast.

 

[Birchtree]

For a Dow Theory sell: Dow close below 10012.23 and DJTA close below 3813.91. This will be the second time the Dow has been there and we could see the Transports go Monday - but I wouldn't bet on it. I'm staying bullish as usual.

 

[coolhand]

I kept waiting the the mid-day rally, but the decline was steady. We are at the bottom of the May 6th trading range again, and I agree that if we open down sharply Monday and cannot close back above today's close, we could be in for trouble. But historically, things reverse quickly after a jobs report sell-off. Wishful thinking.

As I mentioned in today's blog, we also closed below the "flash crash" low. That's going to make it even tougher to mount a sustained rally.

 

[Bullitt]

It's news like this that causes main street capitulation, so joining the bear crowd here with all fours is not a contrary opinion. I'm sure there will be many 'newly minted bears' over the weekend when the headlines explain just 'how bad it is out there.' However, I'm of the opinion we hit the 'Hope' stage of this market on the day of "flash crash" and Denial soon after.

The market makers know there will be some follow through selling Monday so they can gap it down to their liking. Unlike a limit order, most mutual fund sell orders from the prior day come in at market giving the market maker the ability to dump it or raise it to wherever. I can see them putting it down very close or below support on Monday, which would scare just about everybody but Birchtree.

CH, I think the "flash crash" low is just psychological like Dow 10,000. How many people actually bought the bottom of that mess? There are many many trapped bulls in this drop who got caught buying above Dow 10,700 (alleged breakout level in April).

Seriously. So far we can write off the entire year of 2010 going back to November 2009.