Thursday, May 27, 2010

"I would recommend you panic"

Internals suggest short term rebound likely...

  • Stock market internals are suggesting at least a short term rebound is upon us.

  • This bounce could last anywhere from a few days to a couple of weeks, who knows.

  • Once the buying stops the downtrend should resume in full force, so be careful playing the long side of the market.

  • As of right now our portfolio remains in cash. Check it out by clicking the "model portfolio" link located on the right hand side of the page.

S&P 500 Index - 60 minute chart

Tuesday, May 25, 2010

  • Looks like the U.S. banking index is losing a major support level.

  • Support, when broken, turns into resistance. This isn't a good sign for the markets.

U.S. Banking Index

S&P 500 breaking down.....NYSE having "trouble"

  • The S&P is breaking down below a major pivot point as we speak, this could get interesting very fast.

Tuesday, May 18, 2010

Regulators don't know why but they will (try to) fix it anyway....

Some logical people might say that you need to know why a problem occurred to fix it. Well this isn't the case with the government (again). 'Fixing' (pun intended) the stock market is another blatant attack on the free market. The stock market isn't a sandbox where everyone is a winner and no one can hurt anyone's feelings. The stock market (and all markets) have to be free in order to allocate resources efficiently. There's really no need to explain, read some economic 101 level material if you want an explanation.

Link to article

Here's the highlights of the article:

"Regulators say it makes sense to reach for remedies now, even though they have yet to determine the exact cause of the May 6 market dive."

"The rules would take effect in mid-June under a six-month pilot program agreed to by major U.S. exchanges and the Securities and Exchange Commission."

"Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 percent or more within a five-minute span would be halted for five minutes. These rules, known as "circuit breakers," would be applied if the price swing occurs between 9:45 a.m. and 3:35 p.m. Eastern time. That's almost the entire trading day."

"Importantly, the new circuit breakers would apply to all U.S. exchanges. Most of the 50 or so U.S. exchanges regulate themselves and design their own tools for slowing or halting trading."

Thursday, May 6, 2010

Risk assets losing favor...

  • This is a measure of the amount of risk investors are willing to assume.
  • As you can see it is breaking down out of its trend channel. This indicator usually leads the market; therefore, it could be warning of further downside to come before a decent bounce.

High Yield Corporates/Investment Grade Corporates

Possible bounce in this area....

  • We could have a possible bounce right around this area....
  • Make sure to check out the Model Portfolio (link on right side of the page) to see what moves we're making with our portfolio.
S&P 500 Index