There are many technicians who are extremely worried about this market.....
IBD saying " market in correction "
Louise Yamada saying we are going down to 1600 in S&P 500
Many pundits are expecting a test of low of 1867.01 in S&P 500 and we go way lower....
Some courageous technicians are saying that we test S&P 500 low, then go slightly lower and turn back UP......
Currently S&P 500 is sitting @ 1921.22..IF we take Louise Yamada and many others expectations, we have another 321 points or 16.7% more to go on the downside......
Can any of the above "know it all " can be right or even close to being correct " is the question we all are pondering......
What i have observed lately, that DOW is in serious trouble and looks the weakest......
What i noted with Friday's close that in last 8 trading days we did not violate "1867.01 "
Also we tested support 3 times and made "higher close "
IS this telling us something ?
NOT to many observers, they are looking @ a "major woosh down on Monday"
Also i like to point out that many Nasdaq stocks are showing sign of life and have found bottom, they are old leaders like AMZN , PCLN......
I know....most of us do not own AMZN & PCLN ..so it may not mean much, but leadership matters and strength matters....
SOX is also behaving better technically, so is RUT.....all holding support
SOX & RUT are a very good indicator of things to come in Nasdaq
SO...my conclusion is market is in a basing pattern and may break on the upside with one good news out of China or Fed...
One more thing Bears and Bulls are only 1% apart 26.8% vs 27.8%...that is lower than 2008 to 2009 lows.....a very strong contrary indicator.......means too many traders / professionals believe that market are going lower and are already positioned for it.....so there may not be many sellers left ?
I have positioned myself with patience and conviction and hoping it will pay off sooner or later.....
Good luck with your own analysis and comfort level, it is important to sleep well vs taking undue risk based on your own profile as a trader / investor.
BLOG does NOT give buy or sell.
Saleem
11 comments:
Hi Saleem,
Dan Dicker was calling to buy oil stocks recently:
http://www.thestreet.com/story/13264401/1/exxon-mobil-top-energy-stock-during-epic-shale-boom-and-bust.html
Some fear storage could fill due to foreign imports and refineries slowing, but oil might be a good thing to watch over the next few months. Iran could flood the market next year, but oil has to rise eventually.
XOM, TOT, EOG, HES, APC are his recommendations.
Best of luck!
I've been following David Stockman also, though I'm not convinced things are as bearish as he warns. Stockman is quite ideological. : http://davidstockmanscontracorner.com/
Hi Firebird,
David Stockman i have never heard, but everyone has a right to be bearish/ bullish / neutral but there is always a cost / benefit to every thesis......
In about 48 hours we all know where any thesis stand in any market.
I just follow what is in front of me, internals are my biggest guideline plus RSI....i keep it very simple and has served me well.
Oil...i am not sure is ripe for a directional move yet......
Good luck with your own analysis and strategy.
Saleem
Just so you're aware, China has been selling US Treasuries. And US inventory is rising: http://davidstockmanscontracorner.com/mind-the-us-inventory-surge-thats-where-the-next-recession-is-hiding/
I certainly don't presume to know better than you. Just wanting you to be aware of all information so you can decide correctly.
Hi Saleem,
It looks like a great start to the day!
In doing my portfolio numbers over the weekend, it was really only a few stocks that led to the underperformance, AMBA (-26.5%) and CYBR (-10.3%). SPLK and HUN were also down 6% each, but otherwise most fared ok including WLH (+5.8%). The portfolio ended down 5.12% for the week versus the S&P's -3.40%, bringing my YTD to -4.03% versus the S&P's -6.69%.
I will sell my FCX today to finish the portfolio purge, but then will start the reconstruction process. My worst fears in September are the Fed meeting next week, increasing rhetoric over the debt ceiling (although this is more likely to affect October/November), and more selloff in high growth stocks when PANW reports tomorrow.
Stocks are cheap compared to recent valuation metrics, but it seems the full realization of the Chinese slowdown has lowered perceived earnings outlooks for future years, thereby lowering the P/E investors are willing to pay today. Add on to this the fact that some stocks have been "safe havens" for months now as world growth was creepingly questioned, and I feel like further selling will prevail in some parts of the market. It is clear that some underowned stocks are levitating well, but others can't catch any bid (see AMBA).
I doubt my ability to pick the "right" stocks currently, so I have done a full sell and reset. The key market number for me is the 1975 level we kissed and rejected hard on Thursday. Getting above that line will mark a resumption of the uptrend versus some kind of trendless or declining market in my mind. I want to be thoughtful and patient as I add exposure, and may employ hedging strategies like the TZA again.
I hope everyone's long weekend was great! :)
Stocktrader
Good morning to all
Thanks for sharing your views. It seems it is traders market. Every pull back is a buy. good luck to all
Hi Saleem,
As planned, but reluctantly, sold FCX @ 10.30.
Stocktrader
Hi guys,
FDX is probably my favorite pick here. A combination of low P/E, great long term growth story (e-commerce), high barriers to entry in its industry, and underowned due to months of underperformance. As part of my rethink today, I almost decided to go up to 20% into it today to get some market exposure and stay involved. Today's strength is a good sign for the future--would be a buyer on dips if we get any.
Stocktrader
Hi guys,
Oops, meant "rethink this weekend". I spent a lot of time this weekend on stocks. NFLX is a key to my thesis of "safe haven" stocks needing more selling still. It's not safe for growth stocks until NFLX forms a good base and can move higher again. Chart support is around 80...a long way down in this market.
Additionally, I don't see a reason for institutions to commit long term capital until after the Fed. I would be an aggressive buyer of stocks if they actually raise next week. If they stay at 0, it just becomes another waiting game which is not conducive for stock gains I believe.
Stocktrader
Hi Joseph,
Market is a buy @ appropriate level based on level of overbought or oversold conditions, they fluctuate anywhere from 2% to 10%......dip.....
Good luck with your strategy.
Saleem
Hi Stocktrader,
Good luck with FDX.....
Saleem
Hi Saleem,
I haven't entered FDX yet--I want to stay disciplined with my overall market thoughts, but I am really trying to find a way to enter and maybe hedge some risk. As you know, I hate being in cash! :)
Stocktrader
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