Get Ready
The next major move could be up. Considerably.
What we are seeing is a shift in leadership from energy, steel, ag and industrials to the current industry sectors on the move: transports, REITs, banks, waste management, biotechs, and drugs.
Write it down and start looking for new ideas in those areas. Fuck the short selling. It’s getting crowded.  Short interest is at record levels and has been for a while. Game over.
Also starting to come up in the ranks: gas and electric utilities, electronics, software and computers.
Don’t ask me why. You can’t figure the market out during periods like this.
I believe that we are on the cusp of a shift in the prevailing trends. Take your cues from how difficult things are to figure out. Trending markets are fairly easy to figure out—-both up or down. This market is indicating that a major change is transpiring, imho.Â
It is during these times that traders and investors must be able to adapt to change. It’s not the strong or the smart that survive. It’s the ones who are the most adaptable to change.
Change or die. Â
Disclaimer: I could be wrong and full of bullshit, so don’t plow all your money into stocks.
I agree Alpha, we head higher.
July 29th, 2008 at 5:36 pmi think we head higher but i do not believe this is a long-term trend. i still think we head lower later in the year and 2009.
July 29th, 2008 at 5:45 pmDid you and Ragin meet up today and have a circle jerk?
The market will continue with big swings, up and down, taking everyones money that postions their portfolio in one direction.
There is no going long anymore.
Didnt you get that memo?
July 29th, 2008 at 5:52 pmAn old floor trader once told me that,
“always trying to be ‘right’ about the market will kill you. People have to be open to change, admit when they’re wrong about something, adapt, act, and move on.
It’s the same idea that goes along with cutting your losses short. You have to admit you made a mistake, change things and go with the flow. That is hard for most people to do. It requires a humbleness and discipline that few are willing to commit to. That’s why most people are not successful traders, and never will be.”
That was some of the best advice I ever got.
July 29th, 2008 at 5:55 pmWhat’s so hard to understand?
As long as they are selling oil — this market will go up. Oil dropped $25/barrel in the last 2 weeks to new lows. Anyone questioning how a bear market rally can emerge is retarded.
So far oil has been a superb indicator of short term direction. Furthermore, it should be no surprise that the new leading sectors are almost all the most heavily shorted (banks, airlines, retail).
At this point, indexes are showing enough ’support’ to bring in real buyers and that will really get the ball rolling.
BUT KEEP YOUR EYE ON OIL. When oil drops $5/barrel and closes up two for the day — this thing will roll over in a heartbeat. But that could be at Dow 13,000 for all we know.
July 29th, 2008 at 6:57 pmYou people have all gone mad.. Absolute tomfoolery. You are all being played like a fiddle.
July 29th, 2008 at 7:50 pmSierra,
I remember a time when you used to play the swings. There is nothing different here, right now, than it was last year, when you were trading short term from your VV picks.
There are still plenty of opportunities to profit.
I’m very surprised you’ve turn so adamantly against pulling regular money out of the market.
July 29th, 2008 at 8:15 pmthis is a traders market. full stop. folks married to any bias long or short will suffer. follow the supply and demand and listen to the market particularly when you get to swing points. Its at those swing points that the market will reveal which direction it wants to go.
to wit: if you attack a swing point on higher volume it says higher prices are in the future, if the volume is weak at the swing then the force isn’t present to continue the move.
flexibilty is a key component of the traders psyche, sometimes it means cutting losses and changing direction other times it can mean shortening your time horizon. Myself i have had to shorten up my holding period and basically take what the market gives me …..
July 29th, 2008 at 10:07 pmHey AD, good to see you back … hope you had a great fishing trip. Oh, and a great post BTW!!
This seems like as good a place as any to post the daily update from OEW: http://caldaroew.spaces.live.com/?_c11_BlogPart_BlogPart=blogview&_c=BlogPart&partqs=amonth=7&ayear=2008
Yesterday, at the close, the SPX hit the maximum downside limit for the 1240 pivot at 1234. Today, the market gapped up slightly at the open, and then resumed the rally from the SPX 1200 lows, breaking through the 1240 pivot at 10:30, and then the 1261 pivot near the close. Thus far, this rally continues to move along as expected. The original projection was for the SPX to rally in an ‘abc’ from the 1200 low, with the pivots at 1287 - 1240 - 1327 limiting the moves. Thus far this has been exactly what has happened, as the rally has unfolded 1291 - 1234 —-. Posted a fibonacci relationship between these Minor waves on the SPX hourly chart. Chart link below. At SPX 1290 wave c = 0.618 wave a, and at SPX 1325 wave c = wave a. The rally should continue for a few more days into next week. Let’s not forget that bear market rallies are selling opportunities. The bear market is not over yet.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
July 29th, 2008 at 11:16 pm[...] on Financials holding up and oil staying in the 120s. I would listen to these guidos (Fly, Alpha) on there rationale for buying [...]
July 30th, 2008 at 11:41 pm