coolhand's Account Talk

[coolhand]

I'm starting to think which choice would be the lesser of two evils:

miss a possbile SP move up, or,
miss a possible SP move down.

I tend to agree with the opinions that the markets will move downward sometime in Q1 2009. But what of the near term, say the next 30 days?

We sure are on a one way ticket up this morning off the opening lows.

Sure, we can still have a correction along the way. I'm thinking it may be prudent to have at least a partial longer term position in stocks with prices so low. We're being programmed to fear bad news and that's usually how rallies start.

 

[ATCJeff]

Sure, we can still have a correction along the way. I'm thinking it may be prudent to have at least a partial longer term position in stocks with prices so low. We're being programmed to fear bad news and that's usually how rallies start.

I agree. But I'm still looking to sell oversold conditions.

 

[coolhand]

I agree. But I'm still looking to sell oversold conditions.

Of course, me too.

Just sold 5% for today. Now holding 30/23/22/25 GCSI.

 

[coolhand]

The other day I posted a blog about a trading strategy called the Seven Sentinels. It was developed by a guy who goes by the handle IYB. Today his system reversed and gave the first buy signal all year. From IYB on Trader's Talk:

"I did most of my buying yesterday, as posted, but I should point out that the SSBS is a good one, the first time all year that we've had all seven go to buy following a clear positive divergence across the board. It's no coiincicence, I'm sure, that this is the first time all year that mortgage markets have had a very strong bid for the second consecutive day, with 30-year holding around 5.25%

I believe an Intermediate Term (Months) Rally is underway. I'm adding double long UWM at 17.81 and QLD at 26.10. "

 

[Bullitt]

I think people are fooling themselves when they say Hedge Funds have further de-leveraging ahead. Pension funds for example, can't afford to keep their money in cash and treasuries forever because their models need that 7-8% yearly gain to keep up.

I see a rally to 1000, slight pullback, then reverse H&S move higher. Of course, it's just a guess so I won't be surprised when it doesn't quite work that way. This second strong daily close above 850 could set the stage for a bear trap rally next week.

I have a very very very difficult time believing that everybody is right about the doomish, gloomish, bearish state of the economy and world stock market. It's also interesting to see that Peter Schiff is becoming a household name at a time in which some of the greatest minds are calling equities undervalued.

That post of yours a few days back about mortgage rates refinancing along with the drop in mortgage rates made front page WSJ news today. Thanks for posting that information.

 

[coolhand]

I think people are fooling themselves when they say Hedge Funds have further de-leveraging ahead. Pension funds for example, can't afford to keep their money in cash and treasuries forever because their models need that 7-8% yearly gain to keep up.

I see a rally to 1000, slight pullback, then reverse H&S move higher. Of course, it's just a guess so I won't be surprised when it doesn't quite work that way. This second strong daily close above 850 could set the stage for a bear trap rally next week.

I have a very very very difficult time believing that everybody is right about the doomish, gloomish, bearish state of the economy and world stock market. It's also interesting to see that Peter Schiff is becoming a household name at a time in which some of the greatest minds are calling equities undervalued.

That post of yours a few days back about mortgage rates refinancing along with the drop in mortgage rates made front page WSJ news today. Thanks for posting that information.

In just two days I've gone from cautiously optimistic with a long term bearish bias to intermediate term bullish. There's still a lot going on out there, but we've got a great set-up to see a serious rally. This is why I wouldn't sell too aggressively right now. Got 30% in cash after the close today since I couldn't be too confident we'd rally this long, but the way things are setting up I expect to go into next week loaded for bear.

 

[robo]

I have a very very very difficult time believing that everybody is right about the doomish, gloomish, bearish state of the economy and world stock market. It's also interesting to see that Peter Schiff is becoming a household name at a time in which some of the greatest minds are calling equities undervalued

Yeah - Jim Rogers was on CNBC today... The one that said buy oil it's going to 200 a barrel and buy China stocks.... Sure Jim - Ok Peter.... I'll take advice from him also! NOT....

Speaking of Peter - TEOTWAWKI Also, This has been a nice Bear Market rally. Around 20% from the lows so far.... I think we are getting a TAD overbought here....ha....just a tad! Even I'm thinking about shorting soon....


TEOTWAWKI - ("the end of the world as we know it")



CROSSCURRENTS SHORT TERM FORECAST: UPSIDE POTENTIAL IS HUGE

That should be it for awhile! Last week’s nosedive created one of the most sold out conditions we have ever seen or ever hope to see. For what it’s worth, the baby went out with the bathwater and the shares of great companies were just tossed away as if zero was around the corner. Enough is enough. At top left, just one sign of the sold out mess that we believe finally reversed Friday. We can count at least three significant rally phases since the 2007 peak in prices and after the most recent collapse, another is way overdue.

Regarding the odds for a TEOTWAWKI ("the end of the world as we know it") scenario, the stock market appears to have already discounted as much as a 50/50 chance that doomsday in the form of another Great Depression is well on the way. At this point, we believe the crisis is as much psychological as it is due to factors such as the enormous derivative blowups of the last several months. As consumers have seen their 401ks, IRAs and pension plan holdings evaporate, they have pulled back significantly from their former spending habits. This should change the day after Thanksgiving, also known as Black Friday, when the holiday shopping season begins in earnest. Retail sales are one third of the economy and one third of retail sales are focused in the month between Thanksgiving and Christmas. While we expect consumers will buy cheaper “stuff” than last year, this is one tradition that is not likely to fall by the wayside, despite the collapse of stock prices.

As well, we would expect heightened anticipation of good things to come as the inauguration approaches, now less than two months away. Clearly, Barack Obama can do no wrong before he takes the oath of office. The public’s love affair with the president-elect has already reached a fever pitch as the Ludlum Elementary school in Hempstead, New York was just renamed to Barack Obama Elementary school.


http://www.decisionpoint.com/TAC/NEWMAN.html

 

[coolhand]

Yeah - Jim Rogers was on CNBC today... The one that said buy oil it's going to 200 a barrel and buy China stocks.... Sure Jim - Ok Peter.... I'll take advice from him also! NOT....

Speaking of Peter - TEOTWAWKI Also, This has been a nice Bear Market rally. Around 20% from the lows so far.... I think we are getting a TAD overbought here....ha....just a tad! Even I'm thinking about shorting soon....


TEOTWAWKI - ("the end of the world as we know it")



CROSSCURRENTS SHORT TERM FORECAST: UPSIDE POTENTIAL IS HUGE

That should be it for awhile! Last week’s nosedive created one of the most sold out conditions we have ever seen or ever hope to see. For what it’s worth, the baby went out with the bathwater and the shares of great companies were just tossed away as if zero was around the corner. Enough is enough. At top left, just one sign of the sold out mess that we believe finally reversed Friday. We can count at least three significant rally phases since the 2007 peak in prices and after the most recent collapse, another is way overdue.

Regarding the odds for a TEOTWAWKI ("the end of the world as we know it") scenario, the stock market appears to have already discounted as much as a 50/50 chance that doomsday in the form of another Great Depression is well on the way. At this point, we believe the crisis is as much psychological as it is due to factors such as the enormous derivative blowups of the last several months. As consumers have seen their 401ks, IRAs and pension plan holdings evaporate, they have pulled back significantly from their former spending habits. This should change the day after Thanksgiving, also known as Black Friday, when the holiday shopping season begins in earnest. Retail sales are one third of the economy and one third of retail sales are focused in the month between Thanksgiving and Christmas. While we expect consumers will buy cheaper “stuff” than last year, this is one tradition that is not likely to fall by the wayside, despite the collapse of stock prices.

As well, we would expect heightened anticipation of good things to come as the inauguration approaches, now less than two months away. Clearly, Barack Obama can do no wrong before he takes the oath of office. The public’s love affair with the president-elect has already reached a fever pitch as the Ludlum Elementary school in Hempstead, New York was just renamed to Barack Obama Elementary school.


http://www.decisionpoint.com/TAC/NEWMAN.html

A lot more risk now in being out of the market than in. That's what I think. We get a long red candlestick any time soon and I'll probably be a buyer.

Boy, won't that be a big boost to close out the year green after these past two months. :cheesy:

I've already recovered about 13% is the past 4 trading days.

Still a ways to go though, but I'm liking what I see this week.

 

[coolhand]

http://seekingalpha.com/article/108254-stocks-is-the-tide-turning?source=email

 

[coolhand]

http://www.tradersnarrative.com/corporate-insiders-in-buying-frenzy-2096.html

 

[coolhand]

http://www.stratfor.com/analysis/20081126_india_update_massive_attack_mumbai_0

 

[coolhand]

source: http://en.wikipedia.org/wiki/Victor_Sperandeo

The four day rule is Sperandeo's favourite pattern for a change in intermediate trend. The rule is

* In an intermediate trending move, a reversal in the form of 4 days against the trend is highly likely to be a trend change.

This rule is based on his examination of trend changes in the Dow Jones Industrial Average from 1926 to 1985. He defines a variant as the "four-day corollary",

* In an intermediate trending move, a sequence of 4 days with the trend followed by 1 against is highly likely to be a trend change.

This rule is looking for a climax over a series of days, instead of a single high-volume climax day.

 

[ATCJeff]

I agree. But I'm still looking to sell oversold conditions.

Man I just realized that I should have said sell overbought conditions. Guess everyone knew what I meant.

 

[coolhand]

Man I just realized that I should have said sell overbought conditions. Guess everyone knew what I meant.

lol...yeah, I know I did. I didn't read it that way either at first.

 

[coolhand]

40/20/20/20 GCSI. Adding a little more to my cash position. Simply looking to increase the spread between my losses and SPX by buying some dips when I can.

Looking out longer term here. It's a marathon, not a sprint.

 

[coolhand]

Take a look at this monthly chart of SPX. Notice the ADX. Sure looks like an Intermediate Term rally coming this way to me. Of course this is in addition to other indicators.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33845924

 

[alevin]

Take a look at this monthly chart of SPX. Notice the ADX. Sure looks like an Intermediate Term rally coming this way to me. Of course this is in addition to other indicators.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33845924

I'm watching the weekly myself. Inching closer and closer. It's hard waiting.

 

[coolhand]

Pay attention to the last 20 seconds of this interview then read my thoughts below:

http://www.cnbc.com/id/15840232?video=938964876&play=1




This lady reaffirms my contention that we could see a massive rally coming soon. All this cash is flowing into bonds, forcing yields down to near zero in some cases. She makes a good point that it's happening because folks are looking for stability and a safe haven. BUT, they are being penalized with close to a zero return. This is an indication of an awful lot of folks leaning a particular way. I don't take those bets. Bonds are very overbought and have been penetrating the bollinger bands to the upside.

Where is that cash going to go if the market decides to move higher for the next few weeks? I bet a lot of it finds its way into the stock market. I don't know what the catalyst might be other than good sales numbers. We might not even need that. Bearishness is so pervasive still, especially in the teeth of the recent run-up, that we could easily see a head fake to trap the bears.

My recently bullish stance has nothing to do with fundamentals. I don't care how bad the news is at the moment. I don't care what CNBC has to say or any talking heads.

I may end up being wrong, but I'm playing for a big rally right now. 40% of my TSP is in cash at the moment with 20% spread out between C,S, and I. If we do end up going lower in a significant way soon, then I've hedged myself to take advantage of lower prices. If we continue higher with no significant weakness to exploit, then I still have a 60% stock position. But I do expect weakness and will be a buyer if it shows up. It is due.

I am still not long term bullish. Only Intermediate Term. That could last from 2 weeks to 2 months or so.

 

[tsptalk]

Interesting. Thanks.

 

[airlift]

Coolhand,
Thanks for the video clip. I read someone saying the other day that the traders are expecting the FED to be more aggressive by lowering rates further.

If my recollection has any usefuleness, I think that Corepuncher (forgive me if I am wrong) mentioned some reasons to be out of the stock funds before December 2nd. I don't remember what the event on December 2 will be, but this lady's theory is consistent with Bonds being overbought and the FED ensuring lower rates as well. Indeed, seeing your allocation is helpful to make a decison as to what to do. You are nicely hedged for any direction the markets might take in December. Anyone know how the retail sales ended during Thanksgiving weekend? Best wishes!