TAPE has been painful for both bulls & bears.
None of the indices are making any progress, new all time highs were made & then 50 DMA was tested...not a healthy trend...
Since 2014, this market has shown sign of "bearish moves in many sectors"
High beta has been crushed to the tune of 40%
Small caps are beaten down by 10%
Metals & mining is near 3 year lows
We are swinging between correction or bear market moves in many key stocks like GOOG, PCLN, FB,TSLA, AMZN, YHOO, TRIP,LNKD, TWTR, MA....to name a few...
Why am i highlighting these negatives ?
Because TAPE is telling all of us to be extremely careful with our strategy & expectations.
Don't fight the TAPE is an old "technical conclusion"
Many are ignoring glaring sign of trouble in techland & small caps ?
There are times in market where "stocks go nowhere but stay down for months"
2014 is giving all signal that this trend remains intact till October....
New all time highs have no meaning for majority of traders who are stuck in high beta tech or small caps.
VIX currently @ 12.44 very close to 52 wk low which is @ 11.69...52 wk high is 21.91....hint hint.....
What i am doing is staying with boring stocks which are near 52 wk lows......where downside maybe limited & waiting for TAPE to show some strength.
I do not see any catalyst till October which will be a "show me time for many stocks"
SO...know your stocks well & understand what has gone out of favor.....
This IS a normal market where "all boats will not be lifted"
Only select few will move UP.....
BLOG does NOT give buy or sell.
Saleem
8 comments:
Hey Saleem,
It sounds like both you and I threw in the towel, accepting this rangebound market and not looking for that breakout anymore. Does this mean the market is finally ready to run?! :)
Stocktrader
Hi Stocktrader,
Most stocks will continue to struggle....
We have to be patient for another 4 months.
Saleem
Hey Saleem,
It would have been a perfect day to trim some long positions, but my short hedge is so big, I have to wait to unwind them together. Tomorrow is the first day I can do that...
Stocktrader
Hi Stocktrader,
Are you restricted to sell your long position?
Saleem
Hey Saleem,
The long TZA, yes. If I sold that today, the account would be under certain trading restrictions for six months. I could theoretically sell any of the individual long stock positions today, but that would make me even more short because I couldn't pare back the TZA hedge immediately--I don't want to get more net short right now just in case something positive happens.
Stocktrader
Hi Stocktrader,
OK....I see the net net of your choice...Hopefully Tuesday may balance everything.
My guess is that Tuesday may be a weaker close.
Saleem
Hey Saleem,
In other news...my selected cloud/internet stocks are some of the best in their sector today: DATA PFPT YELP Z NOW. I'm actually up ~0.4% overall despite the huge TZA position.
Stocktrader
Hi Stocktrader,
That is a great confidence builder.
As they say "what goes down must come UP"
Saleem
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