The bulls came back strong today and pushed the large cap Dow and S&P 500 indices to new highs. The Russell and Nasdaq even participated as they bounced off of support levels. So it was a good day for the bulls but I have to note that volume decreased today. New highs on lower volume always make me nervous.
The Naz bounced off of 2,525.
The 1,500 area is becoming pretty good support for the S&P. I’ve drawn a new March trendline for it since it made a new high. So much for the one it broke last week.
The Russell rebounded off of its 50-day moving average.
Trend Table
The S&P’s short-term trend is now up.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Up(+) | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
I have to admit that I am more than a bit dumbfounded by today’s market action. Just when you think those bulls have run out of ammo, they find yet another bullet or two for their gun. You certainly can’t outthink this market, because that will get you into real trouble – I choose to just react and let it do it’s thing – as Mark Douglas says, you only need to know what YOU are going to do, in reaction to the market.
Take today for example, some mixed economic data, but perhaps overall more negative than not (of course, depending on their mood, the bulls seem to see bad as good, bad as bad, good as bad, etc. – you get the picture).
Eddie Lampbert, Carl Icahn – they have had their share of success, and screwups too. How does the revelation of what they have been buying (notice I said “have been”, as you can be pretty sure their positions are well built before they become public knowledge) translate to jumping on the train 100 meters before it reaches the station? I.E. there will be a healthy correction, and the more johnny-come-latelys keep showing up with devalued, fast cash in hand, buying DOW stocks, sending it up parabolically, the harder it is gonna fall, when it does.
I jumped into puts on the SPX late in the day on the 10th, when it had clealy broken it’s sharply ascending trendline on very decent volume. Seems I was premature, and have a 30% loss to show for it. I bought a couple months out, because the volatility was low, and did not pay that much for time value. Well, if the SPX manages to close back above that trendline, and resume it’s insane uptrend, who am I to argue? – I’ll wait for the next pullback and ride it up some more. You can’t tell people how to spend their money – even if they are idiots. Still think the best way to be long in this market is to take some profits now, come back in a couple of months and scoop up what looks good after the correction (and there WILL be a correction).
I have a question to chartists – is there any online charting site that allows me to plot formulas based on stock tickers?
For example, if I want to plot:
LOG(IBM) * MSFT + AAPL
- where can I do that?
More realistically, I’d like to plot things like:
LOG($TRINT) * $SPX
Yuri, your post sounds like someone who lost 30% on his SPX puts. Calling people idiots because they believe the market still has room to run makes you sound like a sore loser.
Lampert’s disclosure in C was met with enthusiasm because the megabank has been stale while most other blue chips have rallied. Look at the past 12 months, from about $50 to about $53 while DIA has gone from $111 past $133. But it’s still Citibank; it’s not going anywhere. Lampert saw value and acted accordingly, people know Lampert’s a shrewd investor so they act accordingly.
Meanwhile, the global economy is on fire so the US economy is along for the ride. Why fight the trend and try and predict a correction or even try to sell at the top? The path of least resistance, at least in large caps and especially those with international exposure, is still up.
I’m not saying we won’t see another Feb 27 within the coming months, especially if China’s brokerage houses run out of account numbers, but YTD the DIA is up 8.6%, and SPY is up 7% with their historically strongest months behind them. I don’t know if I’d really consider that a parabolic rise. Yes we’re setting new highs, and yes it’s been a long bull run, and yes certain parts of the economy aren’t so great. But the highs aren’t that high considering the boom we got from the (still) historically low interest rates, there no set-in-stone length to any market run, bull or bear, just generalizations, and the market and the economy have had disconnects in the past. Housing is slumping and inflation is rising, but M&A and buybacks are at all time highs and we’re benefiting from the global economic boom.
Enjoy the ride, good luck to you.
qqqq,
I don’t know of any sites that will let you do that and I’m not even sure that you can do those type of formulas in MetaStock