Comments on: Blow-off tops everywhere http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/ Thoughts on the markets and the decline of the west Mon, 20 Dec 2010 21:59:24 +0000 http://wordpress.org/?v=2.6 By: CBS http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4988 CBS Fri, 07 Aug 2009 06:34:01 +0000 http://sovereignspeculator.com/?p=2575#comment-4988 Axclr8, Email me at ctx_coverage@yahoo.com and I can fill you in. Axclr8,
Email me at ctx_coverage@yahoo.com and I can fill you in.

]]> By: Axclr8 http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4947 Axclr8 Thu, 06 Aug 2009 00:50:21 +0000 http://sovereignspeculator.com/?p=2575#comment-4947 CBS et all: You have to see this story re AXL: American Axle and Manufacturing Holdings Inc., up $1.14 at $3.75 The auto supplier's second-quarter loss shrunk in half from a year ago -- but so did its sales due to Detroit automakers' plant shutdowns. http://finance.yahoo.com/news/AIG-American-Axle-Whole-Foods-apf-3639632120.html?x=0&.v=2 Makes a lot of sense .... btw CBS, what software did you use to generate that list of companies??? CBS et all:

You have to see this story re AXL:

American Axle and Manufacturing Holdings Inc., up $1.14 at $3.75

The auto supplier’s second-quarter loss shrunk in half from a year ago — but so did its sales due to Detroit automakers’ plant shutdowns.

http://finance.yahoo.com/news/AIG-American-Axle-Whole-Foods-apf-3639632120.html?x=0&.v=2

Makes a lot of sense …. btw CBS, what software did you use to generate that list of companies???

]]> By: UDtrend http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4943 UDtrend Wed, 05 Aug 2009 20:46:56 +0000 http://sovereignspeculator.com/?p=2575#comment-4943 sorry, just a correction. the even superior ( i meant inferior, :)) one will be the Warrants and Callable bull/bear Contract that’s sold to the general public sorry, just a correction.

the even superior ( i meant inferior, :)) one will be the Warrants and Callable bull/bear Contract that’s sold to the general public

]]> By: UDtrend http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4942 UDtrend Wed, 05 Aug 2009 20:45:32 +0000 http://sovereignspeculator.com/?p=2575#comment-4942 Hi Mike, I agree with you on the indication of public complacency here. I also sense that from the mid of July after the turn around of DOW and the world's market. Equity put/call ratio and Rydex mutual fund flows we would consider it a higher tier of investors in our market, the even superior one will be the Warrants and Callable bull/bear Contract that's sold to the general public, which gives a better indication of how the market perceives about the rally. I'm also waiting for that specific moment, I'm bullish since March, and still bullish at this moment. Hopefully I will be able to pull myself out from the crowds later. from a technical, fundamental pt of view, we should definitely jump off the cliff, the thing is there are just way too much money out there, especially in our market, funds just keep coming in (non-stop). Im looking forward for a small pullback, and the resumption of the uptrend again. summer is definitely not a good time for bears. Hi Mike, I agree with you on the indication of public complacency here. I also sense that from the mid of July after the turn around of DOW and the world’s market. Equity put/call ratio and Rydex mutual fund flows we would consider it a higher tier of investors in our market, the even superior one will be the Warrants and Callable bull/bear Contract that’s sold to the general public, which gives a better indication of how the market perceives about the rally. I’m also waiting for that specific moment, I’m bullish since March, and still bullish at this moment. Hopefully I will be able to pull myself out from the crowds later.
from a technical, fundamental pt of view, we should definitely jump off the cliff, the thing is there are just way too much money out there, especially in our market, funds just keep coming in (non-stop). Im looking forward for a small pullback, and the resumption of the uptrend again. summer is definitely not a good time for bears.

]]> By: Mike http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4941 Mike Wed, 05 Aug 2009 20:24:41 +0000 http://sovereignspeculator.com/?p=2575#comment-4941 Hi Ed. Thanks for dropping by. I agree, there is room for some more upside in risk assets if bonds and the dollar want to extend their declines into deep oversold territory, but the equity put/call ratio and Rydex mutual fund flows have reached levels that indicate public complacency. They are not stretched to extremes, but I consider it likely that we have a pullback from here or sideways action of at least several days. If it were my game, I'd be a seller of near-term calls here with a tight stop. Anyway, my own strategy centers around buying enough time with far-dated puts to let the market fizzle out on its own schedule. From that point of view, it's an attractive short at these levels. Hi Ed. Thanks for dropping by. I agree, there is room for some more upside in risk assets if bonds and the dollar want to extend their declines into deep oversold territory, but the equity put/call ratio and Rydex mutual fund flows have reached levels that indicate public complacency. They are not stretched to extremes, but I consider it likely that we have a pullback from here or sideways action of at least several days. If it were my game, I’d be a seller of near-term calls here with a tight stop.

Anyway, my own strategy centers around buying enough time with far-dated puts to let the market fizzle out on its own schedule. From that point of view, it’s an attractive short at these levels.

]]> By: UDtrend http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4940 UDtrend Wed, 05 Aug 2009 20:07:53 +0000 http://sovereignspeculator.com/?p=2575#comment-4940 Hi all, just drop by and quite impressed with the work done by all of you guys here, anyway, just a few words to the market atmosphere. from what i perceived, the market is not totally bullish like all of you mentioned here, Bearish > Bullish (public), 'coz there are still way too many derivatives (bear, put) bought by the general public which has a lot to say about the perception of the current economy, they have done so since the start of the rally. As you can see, many of them are broke, but they still keep doing it. We are almost there, but I dont think we are there yet probably need some more time to attract the majority of the people back to the game again. cheers. Ed from Hong Kong Hi all,

just drop by and quite impressed with the work done by all of you guys here, anyway, just a few words to the market atmosphere.
from what i perceived, the market is not totally bullish like all of you mentioned here, Bearish > Bullish (public), ‘coz there are still way too many derivatives (bear, put) bought by the general public which has a lot to say about the perception of the current economy, they have done so since the start of the rally. As you can see, many of them are broke, but they still keep doing it. We are almost there, but I dont think we are there yet probably need some more time to attract the majority of the people back to the game again.

cheers.
Ed
from Hong Kong

]]> By: Mike http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4938 Mike Wed, 05 Aug 2009 19:12:40 +0000 http://sovereignspeculator.com/?p=2575#comment-4938 Sure, a rally of this magnitude has momentum. I don't expect it to drop right off a cliff, which is why I bought a few August calls when we were down 1% today (I just sold them a few min ago). Like I said above, if the dollar keeps dropping the market could keep drifting higher for another few days or couple of weeks, and some commodities could make moonshots. But my long term view remains the same -- sentiment drives everything and theories about China and the Fed and Goldman driving prices up forever are just what would you would expect to emerge at a time like this, which is exactly when you want to put on your shorts. Sure, a rally of this magnitude has momentum. I don’t expect it to drop right off a cliff, which is why I bought a few August calls when we were down 1% today (I just sold them a few min ago). Like I said above, if the dollar keeps dropping the market could keep drifting higher for another few days or couple of weeks, and some commodities could make moonshots. But my long term view remains the same — sentiment drives everything and theories about China and the Fed and Goldman driving prices up forever are just what would you would expect to emerge at a time like this, which is exactly when you want to put on your shorts.

]]> By: jason bourne http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4937 jason bourne Wed, 05 Aug 2009 18:35:38 +0000 http://sovereignspeculator.com/?p=2575#comment-4937 Mike, the worrying thing is apparently many people (I don't know if it's the majority or not) are not trusting this rally. If they actually happen to be the majority, then from a contrarian's perspective it has still quite a long way to go. It's not induced by improvement in economy, but by liquidity. Fundamentals... yes, they are horrific. But with horrific fundamentals, markets can still rally. Whatever the reason. All sorts of crazy things are taking shape. China is becoming a huge hedge fund, injecting liquidity (piling on debt) like nuts, hiding its NPL, buying up commodity oversupply at elevated prices, etc. Government Sachs, I guess many people know better than me. There are simply too many reasons for the market to go down right now: market structures (technicals), domestic fundamentals, foreign fundamentals (possible Europe-China blowup, especially), euphoria, and others. But it just keeps going up relentlessly. Now, in the face of this, shouldn't we review our bearish views again? Perhaps the bull-market is real -- for rather dark reasons, not economic health. Or... probably count me in as an additional bearish capitulation (LOL). Mike,

the worrying thing is apparently many people (I don’t know if it’s the majority or not) are not trusting this rally. If they actually happen to be the majority, then from a contrarian’s perspective it has still quite a long way to go.

It’s not induced by improvement in economy, but by liquidity. Fundamentals… yes, they are horrific. But with horrific fundamentals, markets can still rally. Whatever the reason.

All sorts of crazy things are taking shape. China is becoming a huge hedge fund, injecting liquidity (piling on debt) like nuts, hiding its NPL, buying up commodity oversupply at elevated prices, etc. Government Sachs, I guess many people know better than me.

There are simply too many reasons for the market to go down right now: market structures (technicals), domestic fundamentals, foreign fundamentals (possible Europe-China blowup, especially), euphoria, and others. But it just keeps going up relentlessly.

Now, in the face of this, shouldn’t we review our bearish views again? Perhaps the bull-market is real — for rather dark reasons, not economic health. Or… probably count me in as an additional bearish capitulation (LOL).

]]> By: Mike http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4936 Mike Wed, 05 Aug 2009 17:18:36 +0000 http://sovereignspeculator.com/?p=2575#comment-4936 Take a gander at that dollar chart. If it tracks down to the bottom of the channel (it looks like it should but if it did sentiment would reach sub-5% levels and it would be the mother of all longs, like the 3% bullish reading on stocks in early March). If it does that, expect total pandemonium as commodities make spike tops and for equities to keep running up on fumes for another week or two. That would likely mark the top of the wave 2 rally. On the other hand, if we turn now, we could still recoup for another run at new highs. No matter what happens in the next few days, a strong reversal within a few weeks is already baked into the cake. Take a gander at that dollar chart. If it tracks down to the bottom of the channel (it looks like it should but if it did sentiment would reach sub-5% levels and it would be the mother of all longs, like the 3% bullish reading on stocks in early March). If it does that, expect total pandemonium as commodities make spike tops and for equities to keep running up on fumes for another week or two. That would likely mark the top of the wave 2 rally. On the other hand, if we turn now, we could still recoup for another run at new highs.

No matter what happens in the next few days, a strong reversal within a few weeks is already baked into the cake.

]]> By: Mike http://sovereignspeculator.com/2009/08/03/blow-off-tops-everywhere/#comment-4935 Mike Wed, 05 Aug 2009 17:02:13 +0000 http://sovereignspeculator.com/?p=2575#comment-4935 Tim Knight posted this shot of dollar sentiment from EWI (I subscribe but I haven't asked them for permission to do this like he has -- they asked me if they could advertise here, but I don't want to make this a business site): http://slopeofhope.com/2009/08/dollar-sentiment.html Now do you guys see what gives me such confidence in a big dollar rally and associated asset sell-off? When you see an extreme in price and an extreme in sentiment, fade that trade! I'm short the Euro, and pretty excited about it, but shorting any non-dollar, non-yen currency will do. Tim Knight posted this shot of dollar sentiment from EWI (I subscribe but I haven’t asked them for permission to do this like he has — they asked me if they could advertise here, but I don’t want to make this a business site):

http://slopeofhope.com/2009/08/dollar-sentiment.html

Now do you guys see what gives me such confidence in a big dollar rally and associated asset sell-off? When you see an extreme in price and an extreme in sentiment, fade that trade!

I’m short the Euro, and pretty excited about it, but shorting any non-dollar, non-yen currency will do.

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