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Change in plans..


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#11 A-ha

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Posted 26 January 2007 - 02:54 PM

If we get a bounce, that will be bullish and that must be bought.... Otherwise I seriously doubt that buying here is a low risk trade because everybody and their grannies waiting to short higher prices, I dont think the majority will short it here... Also those who were short from higher levels mostly covered. Bear's bus is almost empty, this can also be seen here on TT... simply because the market trained us to trade a range here. Things have been changing rapidly if you listened. Yesterday's reversal was a major sign that we are due for a range expansion... In other words, bag holders will likely be shaken out as we breakout of this trading range in the near future.

Edited by xD&Cox, 26 January 2007 - 02:58 PM.


#12 arbman

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Posted 26 January 2007 - 03:08 PM

My guess is this is a 4th wave and there will be a less intense 5th wave decline right after the Fed. The Fed will not accommodate anything until March. I think this sell off is trying to price that in, notice how the rates have been trending higher since Nov and the equities are trying to price this in. I believe this is a temporary reacceleration situation (in the economy) and the declining credit growth will become a much bigger liquidity issue by the end of this quarter as the rates are still high, then I expect a faster slow down in Q2 or Q3. However, I am not sure a recession is given, it might be though the first > 10% correction for years in the equities. The Fed can do a lot after March once the USD gets stronger and the economy will probably send more slow down signals, if they cut aggressively ahead of the election year in fall, they will help both to the housing and the cash markets. - kisa