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Extreme bearishness to IRRATIONAL EXUBERANCE


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#1 dTraderB

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Posted 11 September 2022 - 04:50 PM

Suddenly, after a few days from extreme gloom and bearishness, there is a pandemic of irrational exuberance! And, in September, most bearish month on the year, seasonally. 

 

Most of this seem to be the hope that inflation will be lower than previous month, even if still above 6 or 7^. 

 

Hope is eternal but markets will dash all these bullish hopes, wishes, and dreams by the next week or so, into the end of month & quarter. 

 

OPEX week is here, usually bullish until Wednesday, then down. Could be different this time around -- bullish then down seems more likely. 

 

I will continue to build a partially hedge HUGE SHORT position on all rallies. 

 

 



#2 dTraderB

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Posted 11 September 2022 - 04:51 PM

500 points up or down... he says. 

 

Sentiment Speaks: The S&P 500 Is Setting Up For A 500+ Point Move

"Based upon our methodology, it is clear that the market is now at a major crossroad which will determine the next 500+ move. Yet, it still has not tipped its hand as to the resolution. In fact, I cannot remember another time frame wherein the market was at a crossroad with such a significant and diametrically opposed resolution. Yet, we are now at such a point in the market. For now, I still lean towards the bullish resolution, but I am clearly maintaining an open mind over the coming several weeks.

Last week, I outlined my expectation for the market to rally to the 4100-4200SPX region. Thus far, it is following through rather well. But, that is the region at which the market is facing a serious divergence of outcomes. Should the market be able to continue higher and provide us with a higher high over the 4325SPX region, then it becomes much more likely that the low for the market is in place at 3637, and a rally to 5150+ is likely taking shape. While I would still expect another larger pullback towards the end of the year before the trek to 5150 begins in earnest into 2023, a higher high over 4325SPX makes that pattern much more likely.

However, in order for that pattern to develop in the coming weeks, all pullbacks from this point forth must be corrective in nature. For if we see an impulsive decline (term of art meaning a 5-wave structure), then I would have to view the next 500+ point move occurring to the downside, and pointing us to the 3400SPX region before the market could begin that next rally to 5150+.

In summary, the nature of the market reaction over the next few weeks will provide us with a strong clue as to whether we have begun a rally to 5150SPX+, or if we need one more loop lower towards 3400SPX before that rally begins."

 


#3 pdx5

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Posted 11 September 2022 - 05:17 PM

Stock Markets are staying bouyant because of very simpleand very basic reason.

10 year bonds have yield less than 3.33% TAXABLE. Meaning net yield is less based on tax bracket.

Inflation in August will be higher than 8% which is costing you AFTER TAX money. Meaning actual inflation felt by workers is higher. Reality to set in will reuire 2 more rate incerases by FED of 3/4% each. That could start making bonds compete with stocks again. 10 year Treasury yielding close to 5% will even draw me in, and I hate bonds.


Edited by pdx5, 11 September 2022 - 05:18 PM.

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#4 dTraderB

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Posted 12 September 2022 - 08:09 AM

BULLS active today, can take it above 4150 

 

 

 
Last week was breakout week for #ES_F, clearing its 50dma at 4040 for 1st time since July 19th. My target was 4115 & hit exact overnight. Weak reaction from bears so far Plan today: Dip/base, 4090, 4065-70 supports. Bears must lose 4070 to start sell. 4065 holds, 4140-50 is next
Quote Tweet
 
 
 
 
 
 
ZVBuToeP_mini.jpg
 
Adam Mancini
 
@AdamMancini4
· 12h
Opening update futures #ES_F: Gap up for futures as we continue to push to my 4115-20 target zone from last week - a few points off so far (4104 high as of writing). Bears can't hold 4115-20 we see 4145+. 4085ish overnight support now
 
Last week was breakout week for #ES_F, clearing its 50dma at 4040 for 1st time since July 19th. My target was 4115 & hit exact overnight. Weak reaction from bears so far Plan today: Dip/base, 4090, 4065-70 supports. Bears must lose 4070 to start sell. 4065 holds, 4140-50 is next
Quote Tweet
 
 
 
 
 
 
ZVBuToeP_mini.jpg
 
Adam Mancini
 
@AdamMancini4
· 12h
Opening update futures #ES_F: Gap up for futures as we continue to push to my 4115-20 target zone from last week - a few points off so far (4104 high as of writing). Bears can't hold 4115-20 we see 4145+. 4085ish overnight support now


#5 dTraderB

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Posted 12 September 2022 - 08:09 AM

Yeah. Also dollar down, and FOMO

 

Stock Markets are staying bouyant because of very simpleand very basic reason.

10 year bonds have yield less than 3.33% TAXABLE. Meaning net yield is less based on tax bracket.

Inflation in August will be higher than 8% which is costing you AFTER TAX money. Meaning actual inflation felt by workers is higher. Reality to set in will reuire 2 more rate incerases by FED of 3/4% each. That could start making bonds compete with stocks again. 10 year Treasury yielding close to 5% will even draw me in, and I hate bonds.



#6 dTraderB

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Posted 12 September 2022 - 08:11 AM

McClellanOsc_1381.gif

 

https://www.mcoscill...t_breadth_data/



#7 12SPX

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Posted 12 September 2022 - 08:12 AM

Finally getting back to normality with working although I'm itching to go away again, think I need a longer break.  Nonetheless the market is in an interesting place for expiration this week with basically all of my sold call and put options worth nothing already as the market was mostly flat all cycle.  Not surprising since we had seen such a strong August cycle though.  Market has been going up this past week but with bonds continuing to creep higher it does seem to be slowing the market back down to grind mode.  The inflation will be the key report this week and looking at all of the falling commodity prices its gotta be a decent report so the reaction to it will say a lot.  Couldn't resist the pop for the night session yesterday starting with a Dec short at 4100 and getting an average of 4103, took profits at 4090, then resold at 4105, profits at 4100 and currently for a verified trade, short at 4105 going into the cash open.   



#8 dTraderB

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Posted 12 September 2022 - 08:12 AM

 
Saturday Poll. The next 100 points for the S&P?
  •  
    UP
    58.6%
  •  
    DOWN
    41.4%
4,312 votes·Final results
 


#9 dTraderB

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Posted 12 September 2022 - 08:14 AM

BULLS rising ... but still below 50

 

Your equities view/positioning is (primary reason in brackets):
  •  
    Bullish (Fundamentals)
    17.5%
  •  
    Bullish (Technicals)
    25.1%
  •  
    Bearish (Fundamentals)
    48.4%
  •  
    Bearish (Technicals)
    9%
1,197 votes·Final results


#10 dTraderB

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Posted 12 September 2022 - 08:15 AM

I will continue to  be BULLISH BONDS for the next few weeks.... 

Your *bonds* view/positioning is (primary reason in brackets): [Bearish = rising yields] [Bullish = falling yields]
  •  
    Bullish (Fundamentals)
    29.5%
  •  
    Bullish (Technicals)
    14.9%
  •  
    Bearish (Fundamentals)
    46.3%
  •  
    Bearish (Technicals)
    9.3%
804 votes·Final results