The Stock Market

[DarterBlue]

2 minutes ago, HSFBfan said:

I didnt see it. Ill try to go find it. Grubhub is up 2% today. GE is down almost 2% today

I just bumped it to the top.

[HSFBfan]

1 minute ago, DarterBlue said:

It's probably on page two or three of the topics listed. A lot of new topics have been made since.

Ok

[HSFBfan]

up 546

[DarterBlue]

Just now, HSFBfan said:

up 546

As of now, things favor the bulls. The key support levels have been defended. At least for today. Further strength tomorrow may lead me to liquidate my short positions. But we will see how it goes. 

One thing to keep in mind is that bear markets are much more volatile than bull markets. Financial advisers often tell you to always be fully invested as 90% of gains are made in the best 10% of market days (so you can't afford to miss them). What they neglect to tell you is that 80% of the biggest one day percentage gains occur in the midst of bear markets. 

If you are able to spot tops and bottoms within 5% to 10%, you are probably better off sitting out bear markets in cash, or if you are skilled trying to make money on the short side. But advisers will never tell you this!

[HSFBfan]

20 minutes ago, DarterBlue said:

As of now, things favor the bulls. The key support levels have been defended. At least for today. Further strength tomorrow may lead me to liquidate my short positions. But we will see how it goes. 

One thing to keep in mind is that bear markets are much more volatile than bull markets. Financial advisers often tell you to always be fully invested as 90% of gains are made in the best 10% of market days (so you can't afford to miss them). What they neglect to tell you is that 80% of the biggest one day percentage gains occur in the midst of bear markets. 

If you are able to spot tops and bottoms within 5% to 10%, you are probably better off sitting out bear markets in cash, or if you are skilled trying to make money on the short side. But advisers will never tell you this!

Almost a 600 point gain today

[HSFBfan]

@DarterBlueup 675 points......What a day

[DarterBlue]

21 minutes ago, HSFBfan said:

@DarterBlueup 675 points......What a day

A good day if you are a bull and have long positions. A bad day for me and others who are short.

I have a lot of homework to do this evening. I must prepare for tomorrow. I will update my performance and game plan sometime tonight on this thread. 

[HSFBfan]

Just now, DarterBlue said:

A good day if you are a bull and have long positions. A bad day for me and others who are short.

I have a lot of homework to do this evening. I must prepare for tomorrow. I will update my performance and game plan sometime tonight on this thread. 

Sounds good. I would expect a little bit of a pull back tomorrow. It seems to always be around that 24k number.

[DarterBlue]

Just now, HSFBfan said:

Sounds good. I would expect a little bit of a pull back tomorrow. It seems to always be around that 24k number.

If we have truly put in a bottom, it may keep going as it did in mid February when a bottom was put in off the first market weakness. If we have a bad day tomorrow, that would not be good for the bulls. Triple tests of a support level typically do not work.

The two best bullish scenarios would be: 1. Stocks keep on going up. 2. Tomorrow is relatively quiet with a slight positive bias. If the negative bias is only slight, that would be okay for bulls too. 

[DarterBlue]

Today was a good day for those invested on the bullish side and a bad day for me. Stocks had their best day percentage wise since the summer of 2015, over 2.5 years ago. The major indices recouped just under half the losses they sustained last week. On the day, I lost $8,800, which reduced my gains to just over $8,400 or slightly over 12.5%. 

On the surface, today was hard to fault. All the major averages defended key support levels, whether they were the 200 day moving averages or the February 2018 lows. In fact, the NYSE which had violated its February 2018 lows, quickly reversed above them. With that said, there were two things beneath the surface that should give the bulls some concern. A discussion follows. 

Despite gains of from just over 2% to well over 3% on the major averages, breadth (advancing versus declining stocks) was not as impressive as you would expect. On the NYSE, they measured just over 3-1 and on the NASDAQ, a much less impressive 21-9, or not much over 2-1. What does this say? It says the rally was not as broad based as one would like given the magnitude of the gains. In short, most of the money was put to work in a relatively narrow group of stocks. In healthy bull markets, we tend to see better breadth on big up days. 

Second, volume contracted on both the NASDAQ and NYSE exchanges when compared with Friday and Thursday. Thus, it was more a matter of sellers drying up than institutions buying with great conviction. In strong rally attempts, usually volume expands. 

What does all this mean given the positives and negatives mentioned? It means that today's rally, while impressive, is somewhat suspect. As such, I would not be surprised if the rally attempt stalls tomorrow. As I mentioned in an earlier post within this thread, some of the biggest one day percentage moves occur during bear markets. Today may have been Exhibit A. 

With all of the above said, another strong up day this week, especially if there is no violent selling in preceding days, probably means that the bulls are safe for now. 

What are my plans? I will hold on to my shorts at least through the first half of the trading day tomorrow. During the lunch hour I will evaluate where I think the market is heading and unless further bullish signs are clear, I will most likely keep my positions for at least another day. 

[noonereal]

no snake eyes today... 

[DarterBlue]

22 hours ago, noonereal said:

no snake eyes today... 

Hey, even Luck Casey was known to strike out!

[DarterBlue]

On 3/26/2018 at 4:16 PM, DarterBlue said:

If we have truly put in a bottom, it may keep going as it did in mid February when a bottom was put in off the first market weakness. If we have a bad day tomorrow, that would not be good for the bulls. Triple tests of a support level typically do not work.

The two best bullish scenarios would be: 1. Stocks keep on going up. 2. Tomorrow is relatively quiet with a slight positive bias. If the negative bias is only slight, that would be okay for bulls too. 

Clearly we have not truly put in a bottom as of yet. The NASDAQ actually undercut it's lows Friday on an intra day basis before recovering at the close. So, we are headed toward the dreaded triple test of support levels. 

23 hours ago, DarterBlue said:

What does all this mean given the positives and negatives mentioned? It means that today's rally, while impressive, is somewhat suspect. As such, I would not be surprised if the rally attempt stalls tomorrow. As I mentioned in an earlier post within this thread, some of the biggest one day percentage moves occur during bear markets. Today may have been Exhibit A. 

The rally yesterday was clearly suspect. Whether yesterday was a one day, big, percentage move in the context of a bear market is to be determined. Stay tuned. 

I will update my thoughts later. 

[DarterBlue]

A Mirror Image: Tuesday's market action was almost a mirror image of Monday's. On Monday, the bulls were up big. Today, the bears struck back with vengeance. What do I think this means? Clearly, the rally attempt Tuesday has been stalled in its tracks. This does not mean that all is lost for the bulls. However, it does mean that the 9 year and counting bull market (assuming we are still in a bull market), is, at best, hanging on by a thread. 

Pros and Cons of Today's Action: Approached from the bullish standpoint, the only pro is that Friday's support levels, so ably defended on Monday, were not breached at the close, as the losses today were slightly less than yesterday. On the con side, there are a number. While the magnitude of the losses today did not quite match the gains of Monday, the losses were incurred in heavier volume which accelerated into the close of trade. Since most of the losses occurred in the final hour of trade, it means big, institutional investors (hedge funds, mutual funds and the like) were heavy sellers of stocks today. Second, the averages suffered a key reversal day, in that after opening higher, all the major averages sustained significant losses on the day. Third, despite racking up higher volume, the market traded very thin. What do I mean by that? Characteristics of a thin market include the fact that bids and asks are not stable. As a result of this, it does not take much activity to move prices significantly. Based on my observations of the day's trading, this was a thin market. In bear markets, thin trade is a hallmark, as market makers don't want to commit to bulk trades as they fear heavy losses. 

Performance: We gained $7,700 today. All but $1,100 of Monday's losses were regained. Cumulatively, the positions are up approximately $16,200 or 24.66%. Tomorrow marks one week since they were initiated. 

Expectation: I believe this trade is going to work big time. If the key support levels previously identified in earlier posts do not hold Wednesday and Thursday, the next support levels are between 5 and 9% (depending on the average) below current levels. I feel that it is more likely than not that these support levels will not hold and the current correction/bear market? will begin its next leg down.

Homework: This is for HSFBFan or anyone that has a serious interest in financial markets but lacks much experience. 1. Play some relaxing music. Personally, Europa - Gato Barberi, What does it take - Junior Walker, Mercy, Mercy, Mercy - Cannonball Adderley, work for me. But anything that floats your boat. 2. Go to Big Charts or sign up for a free subscription to Free Stock Charts (they charge for some things but provide a lot free). After doing this, take a look at the following intra day charts for all the major indices (DOW, S&P, NYSE, NASDAQ, NASDAQ  100, Russell 2000, S&P Mid Cap), 1 day, 2 day and 5 day. Make sure you include 50, 100 and 200 periods on the charts you look at. 3. Analyze each chart carefully paying attention to opening, lunch time and final hour action. Look at how increases/decreases in volume affected price. Pay attention to whether the averages closed strongly or weakly on the day. 4. Document the results of your analysis after giving it very careful thought. 

Additional Homework: If you truly have an interest in financial markets, read a few good books written by traders/investors. Some that I found useful were: Alexander Elder - Trading for a Living and Come in to my Trading Room; Nicholas Darvas - How I made $2,000,000 in the Stock Market and Wall Street, the Other Las Vegas; William O'Neil - How to Make Money in Stocks; Mark B. Fisher - The Logical Trader; and, Mark Douglas - The Disciplined Trader. Victor Sperandeo also wrote a very good book whose name eludes me at the moment. And Peter Lynch wrote two very good books on those more interested in investing rather than trading. In addition to this list, any of the Market Wizards series compiled by Jack Schwager are good for providing inspiration but don't really teach you how to fish.  

For what it's worth, feel free to bounce any questions you may have off me here in this thread. I will answer if I can free of charge. 

Going Forward: I believe I have regained my rhythm. Therefore, there is no need to post daily. What I will do with the current open, short trade is: I will post if and when I decide to liquidate it (at a gain or loss it does not matter); at each month end if it's still open, I will update its performance, as well as my current take on it.

Finally, if I am asked any questions I will answer them. Additionally, should anyone start a new thread on the market, I may choose to comment if I think it makes sense. 

[DarterBlue]

On 3/27/2018 at 8:08 PM, DarterBlue said:

Going Forward: I believe I have regained my rhythm. Therefore, there is no need to post daily. What I will do with the current open, short trade is: I will post if and when I decide to liquidate it (at a gain or loss it does not matter); at each month end if it's still open, I will update its performance, as well as my current take on it.

Month End Update:  As tomorrow is both Good Friday and the First day of Passover (a market holiday), this represents  the first month end update on my open short positions. Today the market was up solidly. This has probably emboldened the bulls. My take on the action is less sanguine. While all indices ended substantially higher there are a few concerns and caveats to the day's action.

• First, in the final hour of trade, the market gave up a full third of the day's gains. This is evidence of a lack of commitment by the institutional crowd going into a three day weekend.  
• Second, and related to the first, is the fact that the day's volume patterns were not healthy. What do I mean? For the first five and a half hours of trade, as the market was solidly positive, volume on both exchanges ran considerably lower than it had on either of the three preceding days. However, in the final hour of trade, as the indices were giving back a not insubstantial part of the day's gains, volume accelerated and actually ended up higher on the NASDAQ exchange. As volume precedes price, this is not the kind of action you want to see.
• Third, normally at quarter end, stocks usually surge over the final week of trading. This is due to window dressing on the part of institutions, which want to convey, in their quarterly reports to investors, that they were invested fully, and in the market leaders of the moment. This week we got, at best, a draw with respect to market action.
• Fourth, the market again traded thinly despite fairly high volume being present. As I have stated before, thinly traded markets are a hallmark of bearish action not bullish action.

With that said, there are a somethings bulls can take comfort from.

• First, and most importantly, key support levels were not only defended, but with today's advance, some distance has been gained from them.
• Second, the slide that we saw on Tuesday and Wednesday, was halted, at least temporarily.
• Finally, market breadth was healthy. On the NYSE there were about 4 stocks up for everyone down. While on the NASDAQ, it was a little more than 2-1 up. Good breadth is a hallmark of a healthy market.

Performance: I closed out the quarter up just over 21%, or $14,028. This was attained over 6.5 days of being in the position. I added to the gains made on Tuesday on Wednesday, but had a chunk of them taken back today. 

Outlook: I still like this trade a lot. I expect the selloff will resume next week ahead of earnings. That said, I am never married to a position or to a belief  when it comes to the market. Rather, I let the market's action guide my decisions. So, if the market can prove itself by advancing in a bullish manner, I will exit the trade. Negative or neutral market action next week means I do nothing and let things continue to play out.  

[dan in daytona]

...you've captured my attention playing the down side of the market. Never attempted or tossed $$$ in that direction. That being said I understand the potential before the coming downturn (Bear) finally materializes. Throw in the mix an unsteady Agent Orange, in the White House, with his daily diatribe of venom reaching all quarters, and selling short seems to me a quite risky endeavor for us nonprofessionals (you excluded).  Add the axiom to " Never underestimate the irrationality of the Bulls "  and I'll stay on the sideline and watch you lasso the Bear.        

[DarterBlue]

2 hours ago, dan in daytona said:

...you've captured my attention playing the down side of the market. Never attempted or tossed $$$ in that direction. That being said I understand the potential before the coming downturn (Bear) finally materializes. Throw in the mix an unsteady Agent Orange, in the White House, with his daily diatribe of venom reaching all quarters, and selling short seems to me a quite risky endeavor for us nonprofessionals (you excluded).  Add the axiom to " Never underestimate the irrationality of the Bulls "  and I'll stay on the sideline and watch you lasso the Bear.        

It is. It's usually very hard to make money selling short. Two key reasons: 1. In normal times, bear markets don't usually last long. The average duration is usually about 10 months from start to finish. 2. In all instances bear markets are characterized by very volatile trading, both down and up. Thus, it is hard to determine when they are over and you should take your profits since the markets constantly rally against the short position. 

Now there are a few exceptions to short bear markets. The 2000 - 2002 bear market (dotcom bubble bear market) lasted nearly three years. And, in Japan, they have been in a very, long bear market that has lasted an adult lifetime 1989 - ???, with very few, relatively short bullish counter moves over that period. If we ever got one like that, a whole generation of retirees would be toast if all they had were 401k plans to rely on.

My three principal reasons for going short: 1. This is a very old bull market, the second oldest on record; 2. It is also overvalued, third only to 1929 and 2000, in my opinion; and, 3. Its technical action, since January 29, 2018 has been that of a topping market ready to roll over. A fourth reason is the instability of our man in the White House. At some stage, his unpredictability and perceived instability, become a liability to Wall Street.  

[noonereal]

2 hours ago, DarterBlue said:

It's usually very hard to make money selling short.

Playing wrong always maintains an advantage over playing right in craps. Maybe you'd be better off changing your game of chance. 

[noonereal]

4 hours ago, dan in daytona said:

Agent Orange, in the White House

LOL 

Now, don't be a Trump!

[DarterBlue]

2 hours ago, noonereal said:

Playing wrong always maintains an advantage over playing right in craps. Maybe you'd be better off changing your game of chance. 

No. The stock market I have studied. Craps or its Jamaican version, I have assiduously avoided. Perhaps that's due to the fact that many serious altercations, some ending in death, used to take place back in my hood over such games.

Now penny ante poker, I will admit I was a sucker for that game; used to play with some pretty rough hombres as a youngster, including one you may have heard of named Delroy "Uzi" Edwards. But back then, Uzi was a quiet youth. Hard to believe what he morphed into later in life. 

[GloryDays]

On 3/23/2018 at 12:19 PM, HSFBfan said:

Millionaires are the ones creating jobs by having business helping us get paid. So I hope the rich keep getting more rich esp the ones in charge of business 

Holy bejeebus, what trickled down upon you my Son?

[HSFBfan]

1 hour ago, GloryDays said:

Holy bejeebus, what trickled down upon you my Son?

A job

[DarterBlue]

1 minute ago, HSFBfan said:

A job

Hopefully, the millionaire that hired you is giving you a good salary and good benefits!

[HSFBfan]

6 minutes ago, DarterBlue said:

Hopefully, the millionaire that hired you is giving you a good salary and good benefits!

Hope so

[GloryDays]

41 minutes ago, HSFBfan said:

A job

If that fucker has millions he should be giving you a career.  

 

A job is for pocket money.