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Market priced for Perfection - Price Action Strong, Seasonality Weak


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#11 dTraderB

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Posted 07 February 2021 - 08:31 PM

closed NQ hedge long +210.5

 

Did well on Friday to claw back from early losses to end with a small profit but this was not enough for a weekly profit. Will close HEDGE LONG if profit of 210 points or highet.

47 QQQ PUTS
1 NQ HEDGE LONG 13472



#12 dTraderB

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Posted 07 February 2021 - 09:04 PM

BUY LIMIT NQ 13550 order placed, resume 5am Monday



#13 dTraderB

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Posted 08 February 2021 - 07:15 AM

Will add 2 extra lots on NQ LONG DAYTRADES AS HEDGE.
WILL add MORE QQQ PUTS ABOVE current NQ ATH

#14 dTraderB

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Posted 08 February 2021 - 07:16 AM

Canceled

BUY LIMIT NQ 13550 order placed, resume 5am Monday



#15 12SPX

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Posted 08 February 2021 - 10:30 AM

Just sitting waiting being patient, average short now 3823 and even with this rise my 3970, 4000 and 4100 calls all losing premium....



#16 redfoliage2

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Posted 08 February 2021 - 10:44 AM

It was CHINA Trade Talks the last time markets got a great excuse to rally; this time it is STIMULUS, mainly. 

But, this market is now priced for perfection, with strong Price Action that trumps Weak Seasonality, so expect several attempts to rally near to SPX 4k. All will eventually fail. 

Of course, in the long run and eventually we are all dead so who cares if the markets will fail after more rallies? Not me.... LOL. 

 

 

Seasonality Looks Weak, but Price Action is Strong
Arthur Hill |  February 05, 2021 at 11:44 AM
 

The seasonal patterns over the next two months are not very strong, but price action is strong with the S&P 500 hitting a new high. Price action is more important than the seasonal pattern because profits and losses are driven by price changes, not seasonal tendencies. Seasonality becomes a force when it aligns with price action. Let's investigate.

The chart below shows the seasonal patterns for the S&P 500 over the last twenty years (2001 to 2020). Note that I shifted the slider one year to the left to exclude 2021. Thus, data for January 2021 and February 2021 are

not included.

At this stage, I do not have June on my mind. However, looking out over the next three months, the seasonal patterns show a 50/50 chance for a correction of some sort in February and/or March. Such a correction could make for a great buying opportunity with April around the corner.  

736fb2e7-8603-4fdf-800a-940dbf9d3aad.jpg

The price chart for SPY goes not confirm the seasonal pattern because the ETF hit a new high this week, as did QQQ and IWM. Thus, thoughts of a correction are on hold for now. With this week's big bounce, SPY established short-term support with the January lows. A break below these lows would show the most selling pressure since September and argue for a correction, especially with weak seasonality in February-March.

https://stockcharts....ut-pri-763.html

 

 

 

It's an unprecedented bubble but let it run thru its course ....................


Edited by redfoliage2, 08 February 2021 - 10:47 AM.


#17 12SPX

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Posted 08 February 2021 - 12:32 PM

Was thinking and remembered this time last year I was playing a tennis tournament in Guadalajara and everything was the same, overvalued, over extended, technically way overbought etc etc etc.  When we get small corrections along the way advances can continue but when its only up I get a sinking feeling.  Guess we'll see what happens in time!  



#18 12SPX

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Posted 08 February 2021 - 09:34 PM

Had to add to my short here, if we stay up might even add more for overnight, average now 3835!! 



#19 dTraderB

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Posted 09 February 2021 - 06:37 AM

Almost a repeat of Friday --  a small profit, $640 

Stimulus talk still driving rally, also crazy goosing up some stocks e.g. TESLA bitcoin strategy that failed, so far

A TOP being formed, ST or IT or both. 

Will add more QQQ PUTS if NQ trades above recent ATH

 

49 QQQ PUTS

1 NQ Hedge LONG 13627 



#20 dTraderB

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Posted 09 February 2021 - 06:38 AM

... and SPACs! 

700+ new highs for Naz. I will look tomorrow but I suspect we're back to the triple counting of SPACs