12 replies to this topic

[denleo]

Tomorrow is economic report, which will be interpreted as either "economy is strong" or "inflation is low". Should be good for 7 or more S&P points on the upside. Buy now, ask questions later. Denleo

[redfoliage2]

Tomorrow is economic report, which will be interpreted as either "economy is strong" or "inflation is low". Should be good for 7 or more S&P points on the upside. Buy now, ask questions later.

Denleo

It also could gap down unless you know the data now.

[arbman]

Today the volume barely exceeded Monday's volume. This is not how the post holiday volume usually picks up, imho. Many still appear to be on vacation, so low volume = up, employment report usually = up. Bears will probably have to wait until next week. I will accumulate some index shorts since the market is getting quite stretched... A gap down will probably rally tomorrow morning due to the above reasons...

[denleo]

Reaction to the report can not be negative (if it is, it will be bought by 10:30). If it is close to estimates = Goldilocks If the economy lost jobs = No Inflation If the economy created too many jobs = Strong Economy No matter how you look at it, the market will go up. On top of that we have very low volume (low volume = up market) and the bond market has already sold off (we priced it in). Bears can't win. Denleo

[arbman]

yes denleo... and if it sells off, it is probably the top for a while. In any case the volume will probably come back next week = bearish, imho... Look at the Nasdaq's new highs-new lows chart, can you spot any instance on that chart when the market was so high and so crappy internally... I can't...

[redfoliage2]

Reaction to the report can not be negative (if it is, it will be bought by 10:30).

If it is close to estimates = Goldilocks

If the economy lost jobs = No Inflation

If the economy created too many jobs = Strong Economy


No matter how you look at it, the market will go up.

On top of that we have very low volume (low volume = up market) and the bond market has already sold off (we priced it in).

Bears can't win.

Denleo

It could be spun in a different way:

If it is close to estimates = no growth ahead, but stocks are at the peak

If the economy lost jobs = economy slowing down, meaning earnings can not keep up with the expectations

If the economy created too many jobs = Inflation and higher rate ahead

Edited by redfoliage2, 05 July 2007 - 05:02 PM.

[denleo]

I also see that internals are not as good as they were during previous rallies. But here comes the solution for the bulls -- they will have to rally indexes without stocks. It happened before and it will happen again. Denleo

[eminimee]

"Bears can't win."

Is that said with "selling naked puts" confidence? From where I sit....risk is high being long or short into the number....higher risk long imvho.

this could be throwover
http://stockcharts.com/h-sc/ui?s=$COM...id=p13266387501

http://stockcharts.com/c-sc/sc?s=$COMPQ&p=D&yr=2&mn=6&dy=0&i=p13266387501&a=89306176&r=6196.png

Edited by Teaparty, 05 July 2007 - 05:09 PM.

[SemiBizz]

Bottom line is the trend... all rules are designed to be broken in the direction of the trend. We're in an uptrend, therefore light volume and crappy internals doesn't mean we're going to stop the trend. We don't have any valid signals to the downside until they are accompanied by volume... So, the light volume going higher in the context of a downtrend is quite bearish it is bullish in an uptrending market, especially when a strong advance is made and closes near the high.... and going down on light volume which would have been the case today would have just led to a bullish spring off a pivot.. The best circumstance to place a bearish bet such as puts, shorts or Index shorting funds like QID are when the underlying is moving down with volume momentum. The best risk/reward bets are placed when an important high volume pivot is tested on lighter volume. By using the pivot as a trigger you can place a stop just on the other side of the pivot to minimize any loss, in case the bearish upthrust extends. In markets like this one, that continues higher on FAST UPTREND, you must be bathed in the belief that if that pivot did not stop it, then it wants to go higher and test another one...

Edited by SemiBizz, 05 July 2007 - 05:23 PM.

[arbman]

they will have to rally indexes without stocks.

very funny.