coolhand's Account Talk

[coolhand]

Well, since my last post the market has given us some selling pressure of a more concerning nature. I would not say it fell apart, because it didn't, but is it an early glimpse of more to come? Even if the market starts to retrace its short losses, will market participants sell the rallies?

If you are now harboring trepidation about this market, you can join NAAIM in that sentiment. This week's NAAIM mean average fell about 18 pts, which now puts the reading between neutral and modestly bullish. The bears remain fully short and leveraged, but there are more of them now. The bulls remain fully long and leveraged. With such a reading we can't be sure what the market might do over the next week, but maybe the oversold nature of this market sees price retrace at least some of those losses. Maybe.

Basically, NAAIM is now playing both sides of the market. No doubt, many will want to buy the dip and that has worked for some time on hard sell offs. This time may be no different. So, it is up to each individuals personal risk tolerance how you want to be positioned moving forward. I wish everyone luck in however you decide to approach current market conditions.

 

[coolhand]

This week's NAAIM mean average dipped a little more than 2 pts., which is almost meaningless. The reading itself remains bullish, so these money managers continue to respect the longer term bullish trend. The bears remain fully short and leveraged and they have been on the right side of this market in the short term. I think it bears repeating what I said a week or two ago that this is an election year and that generally means the market finds a way to stay afloat if not outright advance over time. Be that as it may, this is not a normal election year (is anything normal anymore?), so we don't want to get complacent. But as long as NAAIM remains bullish, the odds are generally pretty good that the downside is limited.

 

[mmk119]

A rose by any other NAAIM...
May the force be with us

 

[coolhand]

This week's NAAIM mean average fell almost 20 pts. That still keeps it in a bullish posture, but I note that the bears are now fully short and leveraged. There still isn't a lot of them, so there remains a healthy respect for the longer term trend (up). While I am not trusting of this market, I do respect the trend, so until something breaks I am looking higher.

 

[nasa1974]

My bad, I was in a big hurry and didn’t check before hitting send. The he mentioned referring to Coolhand. I could blame this on a bad wreck that I was in ( 6 weeks in a coma, broken back, etc) but I can thank GOD for helping me to recover.
D

Glad to hear you are on the road to recovery.

 

[dannyboy]

Dannyboy has a lot of knowledge and I think he’s very knowledgeable.

D

My bad, I was in a big hurry and didn’t check before hitting send. The he mentioned referring to Coolhand. I could blame this on a bad wreck that I was in ( 6 weeks in a coma, broken back, etc) but I can thank GOD for helping me to recover.
D

 

[coolhand]

Bartender, I'll have what he's having.

 

[WorkFE]

I'm lost

 

[nasa1974]

Huh! What?

 

[tsptalk]

:dunno:

 

[dannyboy]

Dannyboy has a lot of knowledge and I think he’s very knowledgeable.
D

 

[nasa1974]

Bullish is good. It will get me closer to my high point I was at back in November of 21. 2022 kicked my butt.

 

[coolhand]

This week's NAAIM mean average rose almost 11 pts, which puts it back near where it was 2 weeks ago. So, the reading is very bullish once more. The bears went from fully short and leveraged to just just 50% short (no leverage). There are not many bears at all. These money managers are overwhelmingly bullish and so I continue to look higher myself.

 

[mmk119]

this market just seems to keep on climbing with no rest. WOW!

BTW: Thank you coolhand for the NAAIM info and commentary. much appreciated!

 

[WorkFE]

Until market character changes I continue to look higher and NAAIM continues to do that as well.

Good call, I stepped aside today but agree.

 

[coolhand]

The latest NAAIM mean average reading dipped about 11.5 pts, which puts it back to where it was 2 weeks ago. The reading remains quite bullish, but we do have some fully short and leveraged bears. Their numbers are small, which is why the reading remains very bullish. But understand that the bearish positions may be starter positions that build as the market continues to climb. I am not saying it will play out that way, but it might. We can definitely see that this smart money is very cautious on the short side, but they also know quite well that serious money can be made on the short side or at least will control losses if one is overinvested on the long side should things turn South. I am not projecting bullishness or bearishness, I am simply looking past a weekly reading and where we may or may not be headed. Until market character changes I continue to look higher and NAAIM continues to do that as well.

 

[mmk119]

I agree coolhand. room to go. but, i'm thinking it also looking like a melt up situation; which means it could reverse quickly. keep the powder dry.

 

[coolhand]

This week's NAAIM mean average moved up once again, this time by almost 11 pts. The mean average is now sitting at 104.75, which is quite high and I can see by the numbers that there appears to be no short positions at all. I think there may be some small cash positions, but other than that these money managers are all in on the long and leveraged side of this market. This will make sentiment traders nervous; assuming other sentiment measures are bullish as well (I don't follow them). Yes, this is starting to feel a bit like the 90s irrational exuberance rally, but this isn't the 90s, but it is an election year and that may key to a continuation of upside momentum over time even as we will almost certainly have some dips along the way.

But, as I have said previously, things could change quickly too. It's impossible to know how it all plays out, but I'm thinking this market still has some legs.

 

[coolhand]

This week's NAAIM reading shows the mean average rising another 4pt, which keeps it solidly bullish. The bears have taken off their leveraged shorts and are now just 50% short with no leverage. the bulls remain long and leveraged. So, there isn't many bears left in this poll, though they may not be true bears, just smart traders spreading out their risk. As crazy to the upside as this market has been overall, there is no telling when a top of some meaning may occur. Given that NAAIM is at their best in a bull market, I would take my cues from them when determining my own risk tolerance.

 

[coolhand]

This week's NAAIM mean average rose more than 14 pts, which takes it from moderately bullish last week to solidly bullish this week. The bears remain fully short and leveraged, but there are fewer of them. The bulls remain fully long and leveraged. So, it looks like more upside may be in the cards over the days ahead.