Here’s a 6-month shot of the S&P500 futures:

Source: Interactive Brokers
Looks like another good short set-up here, using a couple of points over today’s high as a stop and 1055 as a target (with much greater bearish potential of course). Like many bears, I’ve been expecting the 2009 rally to peter out since summertime, and I’ve [...]

While Americans were on holiday, the last couple of days have seen some exciting market action. Stock indexes around the world declined roughly 3-8%, “safe” US and German government bonds rallied, and the dollar plunged to a new low then rebounded very strongly. Gold made a new all-time dollar high at $1196 as the dollar [...]

Markets have rebounded feebly from their early November bottom, with speculative interest focused in fewer sectors than in earlier risk binges. The hot money is now concentrated in big-cap US stocks over small-caps, and in gold over silver, reflecting a shift in preference for quality over junk.
With upside momentum taking a breather, we’re in another [...]

I thought I’d make a quick post here to update some of my thoughts on the markets. Here’s the S&P 500:

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Most major world markets and US indexes look more or less like the above. Every one has rolled over since mid-October, and some made their highs several weeks before that. Based on measures of breadth [...]

The tide is turning. We now have a strong, impulsive decline off the highs, confirmed by a rise in the dollar and declines in the metals, energy, and grains. Yes, we’ve seen this before (in June, August and September), but the sustained manic conditions (put/call ratio, DSI, etc) that we saw in mid-September and mid-October [...]

Here’s a 1-month view of the Nymex December light sweet crude contact:

Source: Interactive Brokers
Watch for a break of that trendline. With bullishness running at 95% (and 97% on gasoline and heating oil), this rally must be getting long in the tooth. Also note that the rally has stalled against a longer-term channel trendline (see 1-year [...]

Today’s action reminded me of the trading on Sept 23, with a ramp up followed by a swan dive in the late afternoon. Traders will remember the 23rd as the Fed Wednesday that marked the top prior to the 5% sell-off into the first week of October. Here’s a 1-week view of the Russell 2000 [...]

I’m again very bearish short-term, basically taking the approach that we’re topping until proven otherwise. I think we’re about to roll over like we have three times since early August. Indicators show that each recovery since then has further disheartened the bears and encouraged the bulls, which is as it should be, making each top [...]

This is from Google Trends, which tracks the popularity of search terms:

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The question is, did something change in 2008, or was that just a blip? It astounds me how many stock market bears (and gold bulls) ignore what has become an extremely tight inverse relationship:

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UUP (dollar bull ETF) and SPY:

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Bonds were also up today, of course. Given the extreme degree of consensus we saw during the latest highs in stocks and lows in the dollar, today’s rally could be nothing more than a standard correction (at 40-odd percent, that is all the retracement is so far). It was to [...]