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In the SELLING ZONE but keep our powder dry, for now


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#1 dTraderB

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Posted 28 July 2019 - 09:07 PM

From GMM:

 

Enter The Selling Zone
Posted on July 26, 2019by macromon

We have entered the selling zone — S&P 3025-3100 — to execute the Get Shorty trade.  This also provides an excellent opportunity for long-term investors to start cutting back on risk if they have not already been doing so.

You know our view.  Rarely should LT investors reduce risk in a significant manner, maybe just three to four times during their working lives, but this is one of those times, we believe.

Structural Headwinds 

The tectonic plates of the global international economic order are breaking apart and moving in the wrong direction and valuations are at historic extremes.

Not to mention the absurdity that “billions upon billions” of fixed-income securities seem to enter the negative interest rate Twilight Zone on a daily basis.

Moreover, the Fed is about to take the unprecedented action of cutting rates next week with stocks at historical highs and inflation marching higher.   That signals, at least to us, a Fed gone political and that policymakers have created a beast they cannot tame.

We expect the summer Friday afternoon ramp into the close, which will be an opportunity to start letting some go or setting some up.  It’s hard to sell strength but much more enjoyable than selling into weakness and into a big hole.

Stocks Out Of Runway

The charts below illustrate that history dictates that stocks have very little room to run to the upside from current levels.    We could be wrong and ‘this time may be different.”

We seriously doubt it, however, but discipline always trumps conviction and that is why we have a hard stop at 3125 to cover.  We will then wait to put them out at even more absurd valuations.

Long-term investors that do sell should have a Plan B to get reinvested if they are wrong.

Good luck, folks.   See ya’ thirty-plus percent lower.

Micro Metrics

valuations_1.png?w=640

 

https://global-macro...e-selling-zone/

 

8004552.jpg



#2 LMF

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Posted 28 July 2019 - 11:33 PM

The Fed story right now is about a bunch of dumb price fixers that cant figure out what theyre doing. Its not about the economy or the market or the tariffs or trump or the next election or anything else under the sun. Get it right....

#3 opinionated

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Posted 29 July 2019 - 04:17 AM

It is as its always been LMF, Manipulation... And sudden news surprises that make them loose control. 

 

KISS

 

Best



#4 dTraderB

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Posted 29 July 2019 - 04:57 AM

There may be lesson for the US markets from the YAwwwwwMNNNNNN reaction to the ECB announcements:

 

Summary

The ECB signals a change in policy regarding rates and QE.

The market declined on what was supposed to be bullish news.

https://seekingalpha...ll-announcement



#5 da_cheif

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Posted 29 July 2019 - 05:11 AM

 

There may be lesson for the US markets from the YAwwwwwMNNNNNN reaction to the ECB announcements:

 

Summary

The ECB signals a change in policy regarding rates and QE.

The market declined on what was supposed to be bullish news.

https://seekingalpha...ll-announcement

 

>bombshelll<    .....another one?   lol  yawwwwwnnnn



#6 dTraderB

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Posted 29 July 2019 - 09:15 AM

One of my best NQ SHORT daytrades since.... a long time ago!



#7 robo

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Posted 29 July 2019 - 01:19 PM

"One of my best NQ SHORT daytrades since.... a long time ago!"

 

Not doing much trading right now either.... Lots of talk about this again.... LOL.....  make it 1% and get 5 trillion I think.....I hope that includes buy backs, but at a higher rate since they want to stop it....  Tax the leveraged funds 2%......  Some good trading coming our way as we get closer to the election....

 

https://stockcharts....146&a=678106938

 

Sen. Bernie Sanders has put "Medicare for All" and free public college at the center of his 2020 presidential campaign, and he knows just who should pay for the federal programs: Wall Street. The Vermont independent this week proposed a bill that would impose a small tax on trades of stocks, bonds and derivatives. 

 

Under the measure, any stocks traded would be taxed at a rate of 0.5%, bonds at 0.1% and derivatives at 0.005%. So selling $1,000 of stock would incur a tax of $5. Such a tax could conservatively raise tens of billions of dollars per year, according to the Congressional Budget Office, which estimated the potential revenue at $776 billion over a decade. A 2017 study by the University of Massachusetts concluded a so-called financial transactions tax could yield a far bigger bounty -- $2.4 trillion over 10 years.


Edited by robo, 29 July 2019 - 01:24 PM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#8 robo

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Posted 29 July 2019 - 02:16 PM

My LT Fed rate cycle data below...

 

https://stockcharts....202&a=677494393

 

 

They be loving the cuts.....

 

https://www.naaim.or...exposure-index/

 

  

 

 

Mohamed A. El-ErianVerified account @elerianm 7h7 hours ago

More

Historical reminder--via a @WSJ chart--of the unusually low starting point as the #Fed gets ready to deliver an "insurance cut." (Rather than 50 bps, either one-and-done or with openness to more, look for 25 bps plus language guiding the #markets towards another cut this year.)

EApJIm0U0AIQ2FF.png

Edited by robo, 29 July 2019 - 02:26 PM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#9 dTraderB

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Posted 29 July 2019 - 05:47 PM

damp squib afternoon session

 

may be so until FED cut on Wednesday