216 replies to this topic

[lawdog]

so which is it? option 1) market breadth stinks and we are headed for some sort of decline; or option 2) market is so strong, it can go up even when breadth is bad and with lots of money yet to come in, when that money comes in, breadth improves and you get a wild terminal advance. i'm going with option 2, at least for another day!

[lawdog]

looking at oscillators, there are lots of upside breakouts. i hate to get too bullish here, wanting to avoid overconfidence, but I think the only question right now is concerning the rate of the advance. will it be linear, with consolidations along the way, or will it go parabolic? what is going to hold it back?

[lawdog]

looks like the option folks have called another top. got rid of my vxx at loss of .20/sh, so no big deal. one of these days i will revisit that trade. silver continues to do well. position not large enough to make much diff, but it's fun to be right on a call, no matter the size of position.

[lawdog]

congrats to ferrari finally winning at Monaco after 16 years. would have liked to see Kimi win after taking pole. 

 

can see no reasons for market not continuing higher. the only question is how far, how fast. looking at many indicators of sentiment and momentum, you would think the market went down this week; then again, the spx is only up 1.3% in May. things can change quickly, so i remain vigilant.

[lawdog]

not much to say. naz continues its mad dash skyward. where it stops, nobody knows. are there parallels with 2000? spx sputters along. i hate the spx's failure to show better breadth and momentum. using an automobile analogy, the broad market, including spx and rut, may be running on fumes. the strength of the faang stocks may be masking the overall weakness. rut is more than 1% below its early December peak. i have a feeling this is not going to end well. i'm at 70% invested; selling down to 60% some time today. could we still make 2440-2490 range? sure, and I think this is likely, but I am not going to hold out for that last 1-3% if breadth continues to weaken and fails to pick up. I may just have to let the mkt run on up without me eventually. beware a market with a low TRIN (Arms index) around .60 that does not go up much. 

[lawdog]

sold down to 60%. when we get thru this early weakness today, i.e. backing off opening gaps levels, we could see some strength come in.

[lawdog]

well, i wasn't expecting the Spanish Inquisition. now what to do? Is this the naz break that puts a lid on it? 

[lawdog]

sold all my naz100 on bounce off lows. not going to mess around with this right now. still hold 50% in spx and silver etf. 

[lawdog]

very tempted to add to longs here, but not going to do it. As I have been writing lately, this momentum and breadth weakness may be the true market, signally more weakness to come, or it could just be consolidation, which is a buy opportunity. I will go with the bullish case for now, but will stay at my current 50%. No need to let greed put me in a precarious position. When you have a position that is too large for the conditions, it will often cause you to compound your error as the losses mount. I can handle some more consolidation/drop here with my current position. If it rallies, fine, I'll make some money, and if it declines, I can pare back my position without it being a big deal. Dealing with one's own psyche is a big part of successful trading.

[lawdog]

sold down to 40%; not liking how things are looking for the immediate short-term. good chance i will close all longs today.