A few good signs for Bears

mbna

1. Huge Volume (around 2-3 times of average) for FAZ in the last 2 weeks, means the selloff for FAZ could be in its final stage, or some big institutions are starting to wash off retail investors to accumulate some FAZ as hedge or as midterm investment; Same thing happened to FAS back in late February and Early March.

2. In the last few sessions, the market shows that it does not react to the good news in a very joyful way any more: going up in the morning then going down at the end of the sessions. I think the market is tired by now, or out of steam;


3. September typically has some big selloff.


4. China stock market already has over 20% selloff. Even if US market is going to its final target of 1200, it has to take a break first;


5. During last year's market crash, we had at least 3 big bounces. However, we only had one minor selloff since March low even though the market has been going up for almost 55%.


6.  However, I do suspect that SPY might fill the gap around 1100 from last September's crash, maybe sometime this year;

layschips

i don't think FAZ is a good choice for bears in spite the fact i still have some. apparently financial sector is those WS gang's Eagle's Nest and has become the hardest castle to break down, even though we all know it is the most stinky one.

on the other hand, recent news say some hedge fund managers have accumulated a lot of bank shares. i'm wondering if they will do something unexpected, assuming they are smart enough to be called  'smart money'...

mbna

I just hate those media news: where were they back in March or April? Apparently those hedge funds purchased huge amount of bank shares back then but we did not hear any news about hedge funds purchasing any bank shares back then. Now after those bank stocks already went up say 3, 4, 5, 6, 7, ,8 9, 10 times, we are now starting to hear the news that they already purchased lots of bank shares. I think these news are being used to pump up the bank shares a little further or let the retail investors stay behind a little bit so these hedge funds could dump most of their shares. If we trade on the news, we will be doomed...

BTW, I just mentioned FAZ as some indicator, not saying we should go after it. But I bought 20 SKF $30 Sep Calls at $0.9 for fun yesterday...

acura

http://www.thestreet.com/story/1 ... -likely-topped.html

Kass: Market Has Likely Topped
Back in early March, there were signs of a second derivative U.S. economic recovery, the PMI in China had recorded two consecutive months of advances, domestic retail sales had stabilized, housing affordability was hitting multi-decade highs (with the cost of home ownership vs. renting returning back to 2000 levels), valuations were stretched to the downside and sentiment was negative to the extreme. These factors were ignored, however, and the S&P 500 sank to below 700. To most investors, back in early March, the fear of being out was eclipsed by the fear of being in. Despite the developing less worse factors listed above, bulls were scarce to nonexistent in the face of persistent erosion in equity and credit prices.
It was at this point in time, on RealMoney Silver, in an appearance on CNBC's "Fast Money," on "Mad Money" and in multiple appearances on "The Kudlow Report," I confidently forecast the likelihood that a generational low had been reached.
I went on to audaciously predict that the S&P would rise to 1,050, a gain of nearly 400 points from the S&P low of 666 during the first week of March, by late summer/early fall. I even sketched a precision-like SPDRs (SPY Quote) expectation chart that would reach approximately the 105 level (a 1,050 S&P equivalent) within about six months.
Yesterday the SPDRs peaked at 104.20, within spitting range of my intrepid March forecast of 105, and the S&P nearly touched 1040 in Tuesday's early morning trading.
Arguably, today investors face the polar opposite of conditions that existed only a few months ago, with economic optimism, improving valuations and positive sentiment.
To most investors, today the fear of being in has now been eclipsed by the fear of being out as the animal spirits are in full force. Bears are now scarce to nonexistent in the face of steady price gains in equity and credit prices.

dara

I just hate those media news: where were they back in March or April? Apparently those hedge funds purchased huge amount of bank shares back then but we did not hear any news about hedge funds purchas ...
mbna 发表于 2009-8-27 10:37

They bought those Bank shares on Q2,

After that,  most of them are at least up 20%,some are 50% like BAC.

wyemlyy

But SKF volumn didn't pick up. It decreases compared to July.

yam

I just hate those media news: where were they back in March or April? Apparently those hedge funds purchased huge amount of bank shares back then but we did not hear any news about hedge funds purchas ...
mbna 发表于 2009-8-27 10:37

明智啊！

ranchgirl

It is out of my control...

water_sm

和我的观点非常一致，今天已经空仓，未来几周会利用小资金做短线，静观其变

mbna

Again, the market sells off on good news. Accumulated some FAZ/SKF/SRS as well (only 20%) since this post and still keep my SKY SEP calls as well. .
First target to 950, ideally will be around 900 by the end of September. Was concerned a bit with the thin volume yesterday. But looks like we are having heavy selloff as of now.

mbna

Due to the $5.6 Billion POMO auction this morning, we might have another ripup for about 10-20 points. So take some profit by the end of the day if you have heavy short position or short-term puts. Otherwise would be ideal to add some more shorts tomorrow if we do have another bumpup.

mbna

My target for either SKF or FAZ will be around $40 by September OE. But will gladly settle all my SKF/FAZ calls around 35 area.

mbna

aggressive target for FAZ could even be $50. This march it took FAS just 2 weeks to go all the way from $2.32 to $7.8. So even if FAZ goes to $50 by Sep OE, it is just like from $2.2 to $5, should not be a dream too far away...