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Yes, I am and have been since mid-March. I've seen enough videos from Spain to know what happens when you stand in front of a pack of bulls...
There was so much uncertainty priced into the March lows. Remember, the only thing worse than knowing of bad news, is not knowing of even worse news. Banks were on the brink, automakers were too, etc...Things may not get better for months but as long as more question marks become answers (and answers that aren't as bad as they could be) and the economic data continues to indicate we've maybe at least hit an inflection point, I think it would take some major catalyst to even go so far as to retest the lows let alone break through them.
My opinion, we continue to rally hard for another few weeks or so and the Dow tops out around 9,300 or so as we find ourselves trapped in the 8-9k trading range we were basically in for much of the fall and winter. If we breach that point, then we could even shoot up another couple hundred or so just on the technicals as shorts really start to sweat. Fundementally, at this point we're probably already at the point where valuations are at somewhat reasonable levels given continued depressed earnings and downside potential.
If nothing else, notice how seemingly bad news is now absorbed and not so negatively acted on and good news gets rallied on. At the end of the day, I feel comfortable knowing that there are some limits at this point to the downside, and with a longtern investment strategy, am happy with the opportunity to buy even after this huge run up. That said, still leaving a good percent on the sidelines so that when (not if, but when) we do have a selloff, I'll be able to take advantage.
Pretty much have been in and out with a long bias. Its been a traders market with enough volatility to make short term trades worth it. Obviously the biggest winners were those that got long in early march at or near the lows and investors that did not capitulate. Past couple days I attempted to short expecting the beginning of a broad pullback that just never developed. I think Wx is probably right with the 9k level in the dow being pretty significant. Also expect us to go into a trading range afterwards.
Not all sectors have faired the same. The best performing sectors have been those that are the most heavily shorted such as financial and retail/general consumer. I think there is pretty good value in a lot of energy/material names. Healthcare has been hit or miss but the big cap names severely underperforming. Financials I could never even attempt to fundamentally value them so will continue to purely trade them from a technical and macro perspective. Industrials have been very strong also but if the recession drags on I can see that group getting hit hard.
Bullish crude and most commodities as a whole as I expect inflation to return sometime in late 2009 as a result of the immense govt spending finally shocking the system and making the dollar weaker. Natty has been particularly weak but I dont know the fundamentals of it so cant comment.
Have been bullish the 10 Year since the beginning of and remain so. Despite quantitative easing by the fed rates continue to creep higher. Yields took a while to break through 3%.
Just some of my thoughts on the market. Happy to discuss more in detail if anyone wants.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Bear in mind, some of us by no choice of our own, don't have the luxury of "trading" vs "investing" :)
For those like myself that don't, I've built a strong stomach for unrealized losses and would just rather not miss the train.
That said, if we do find ourselves up in the Dow 9,000-9,500 range, prob a good time to ring the register in anticipation of a downswing.
Ive been trading in and out of positions for the past few months with about 30% of my PA in cash waiting for a pullback...my top flyers have been RIMM (bought around $45, 3 months ago), NE (bullish on drillers), TGT, SKS/JWN (consumer discretionary stocks have rallied),
i missed the big move in bank stocks and have generally shyed away from financials (except SFI)
tomorrows stress test results and fridays employment numbers should be interesting...i have a long bias but think there is probably going to be a pullback in the near term most of my positions have trailing stops
That would annoy the shit out of me if I were not able to trade how I wanted because of company policy. See there are benefits of being independent vs trading at bank.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Like everything else in life, pros and cons to both sides my friend :)
Wx/trade4 - how do you guys come to 9,000 on the dow? I know you guys have more experience in trading that most people here, but is this purely technical analysis?
Yeah this is purely technical. I may lose respect for what im about to post below but i dont care this is how I trade. Here are my thoughts on it.
We had been consolidating in a 400 point channel between 7800 and 8200 before breaking out of the range. A lot of shorts were using this level as their stop. We also broke the 900 level in the S&P which is psychological. 9k is the next major resistance level in the dow and its also a psychological round # where sellers can come in. Throw in the single most important technical indicator - the 200 day moving average which is hovering right at 9k and moving lower each day. The culmination of all these things helps me arrive at 9k.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
interesting - i don't know much about technical, but i enjoy hearing about it from traders/investors perspectives
thanks for the response
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