3SOF

Quote from: tokyopua on November 27, 2007, 01:35:23 AM
So you say you see more lows before highs, does that mean you are still long term bullish despite all this credit crunch news, etc.?

My trading approaches have moved me more short than long. That is my current view.

3SoF runs a model investment portfolio long sided, long term. That is a great approach and will yield excellent results over the long term. I run multiple trading approaches over different timeframes long / short with different capital allocated to each approach based on my risk rules. Plus I take a salary out of my trading. This leads to me hedging / shorting / positioning differently to 3SoF because I can't just allow my overall port to drawdown based on 1 market direction sentiment.
Currently I can't see any catalyst or reason that tells me markets are about to re-bound and make a nice run to prior highs. But just because I can't see it doen't mean it won't, just I can't see it. Hence my positioning.

Miss Blondie here! I can't believe I am short C. I saw the news at 10pm EST last night. Thanks for posting the info. The market will rally today b/c of C! Go C! but wait til I can get out.

Quote from: Houlahan on November 27, 2007, 07:49:12 AM
Miss Blondie here! I can't believe I am short C. I saw the news at 10pm EST last night. Thanks for posting the info. The market will rally today b/c of C! Go C! but wait til I can get out.

U.S. consumer confidence index weaker than expected

«WASHINGTON (MarketWatch) -- U.S. consumer confidence sank in November on growing concerns about the future, the Conference Board reported Tuesday. The consumer confidence index fell to 87.3 from 95.2, well below the 90.2 expected by economists surveyed by MarketWatch. It was the lowest level and the biggest one-month decline since Hurricane Katrina in the fall of 2005. The decline in November was driven by a big drop in expectations, fueled by higher energy prices and falling prices for stocks and homes. The expectations index fell to a four-year low of 68.7 from 80 in October, while the present situation index fell modestly to 115.4 from 118.0.»

If consumers knew what the future holds they would all make a lot of money in the stock market. There's a negative correlation between consumer confidence and the stock market.

I think we're very near the lows and anyone shorting will lose money. Long to the bone here.

The market is responding positively to bad news on the economy. Bears will notice this and will probably run for cover throughout the session. The FED will cut rates again and probably that's going to be the catalyst to push the market to new all time highs (historically it takes 3 consecutive cuts to move things).

Anyway, I'll just shut up because market timing isn't my game and my hand is as cold as it has ever been. Need to cover some stocks, see ya

Today should signal the start of a new rally attempt in the IBD model assuming we keep a good point gain into the close (I know, big assumption recently), then if I recall correctly they will want to see a major follow through sometime starting 4 days after the first rally attempt. 

That number of days seems strangely arbitrary to me, but that is what I recall, and they have lots of historical evidence to show that its valid I guess (again, assuming I have that number correct).  So that would put us out into next week, then probably the next major up catalyst to get us out fully would indeed be a rate cut as David mentioned.  It seems to me a rate cut is in the cards or else the Fed wouldnt have decided to be injecting funds into the market again.  That was the precursor to their first rate cuts this year.

Anyway, so far volume isnt quite what I think we would be hoping for on the SPY at least, at the current rate it might not match yesterday's volume.    (214 Million shares traded yesterday, only 149 M traded today).  Hopefully trade picks up a bit in the last hours (but doesnt drop the market down too much either at the same time)!

QuoteAnyway, so far volume isnt quite what I think we would be hoping for on the SPY at least, at the current rate it might not match yesterday's volume.    (214 Million shares traded yesterday, only 149 M traded today).  Hopefully trade picks up a bit in the last hours (but doesnt drop the market down too much either at the same time)!

Light volume might mean there's less selling pressure now. Let's see if we can hold and extend gains into the close.

I agree with David here, whoever is selling at this point (unlike Aussie, who did a while back) is probably going to lose money. I know it would sound logical to expect a catalyst for the market to go up from here, but I personally do not see much to invest into in the US other than the stock market. The closing costs are $10 (can't beat that), compared to properties transaction, a PC is all that is needed, etc. Investors will scratch their onion heads and will put their money back where it belongs, i.e. the stock market.   

Quote from: David Randolph on November 27, 2007, 02:23:01 PM

QuoteAnyway, so far volume isnt quite what I think we would be hoping for on the SPY at least, at the current rate it might not match yesterday's volume.    (214 Million shares traded yesterday, only 149 M traded today).  Hopefully trade picks up a bit in the last hours (but doesnt drop the market down too much either at the same time)!

Light volume might mean there's less selling pressure now. Let's see if we can hold and extend gains into the close.

Looks like SPY volume will be about the same as or even just a bit more than yesterday, which is a good balance between needing some volume for confirmation but not too much to show the selling pressure has lessened .  If the market closes at the present level it should be a good mix of volume and point advance.

Quote from: tokyopua on November 27, 2007, 03:26:04 PM

Quote from: David Randolph on November 27, 2007, 02:23:01 PM

QuoteAnyway, so far volume isnt quite what I think we would be hoping for on the SPY at least, at the current rate it might not match yesterday's volume.    (214 Million shares traded yesterday, only 149 M traded today).  Hopefully trade picks up a bit in the last hours (but doesnt drop the market down too much either at the same time)!

Light volume might mean there's less selling pressure now. Let's see if we can hold and extend gains into the close.

Looks like SPY volume will be about the same as or even just a bit more than yesterday, which is a good balance between needing some volume for confirmation but not too much to show the selling pressure has lessened .  If the market closes at the present level it should be a good mix of volume and point advance.

Pretty much what I was expecting to happen today did happen, we got an IBD style rally attempt.  Here is their article from the subscription service called the Big Picture:

------------------------------------------------------------

Stocks Rally, Stage Rare Up Day In Higher Volume
BY JONAH KERI

INVESTOR'S BUSINESS DAILY

Posted 11/27/2007

Stocks darted in higher volume Tuesday, buoyed by a capital infusion for Citigroup (C) and a sharp drop in oil prices.

The Nasdaq climbed 1.6%. The NYSE composite advanced 1.4%. The S&P 500 picked up 1.5%, and the Dow industrials 1.7%. Small caps bagged more modest gains, as the S&P 600 rose 0.9%.

Volume picked up across the board. It swelled 12% on the NYSE and 10% on the Nasdaq compared with Monday's levels.


The major indexes fell sharply on Monday, as concerns over the possibility of the Federal Reserve reducing contributions to major banks and lenders heightened fears over the credit crunch.

But Citigroup got some encouraging news late Monday, as Abu Dhabi's investment arm said it would invest $7.5 billion to help offset Citi's credit losses, in exchange for a stake of nearly 5% in the company. Other big banks perked up on the news, including Merrill Lynch, (MER) Goldman Sachs (GS) and Morgan Stanley. (MS)

Wall Street has been searching for signs of hope in both the credit and equity markets for the past several weeks.

Both have remained under pressure, as the ailing mortgage market has wreaked havoc on banks and stocks have fallen into an intermediate correction.

Rally attempts on both fronts have been short-lived. Tuesday marked Day 1 of a new rally try for the broad market indexes. But the stock market hasn't strung together back-to-back up days in weeks.

A small number of sectors have shown signs of strength. Some energy stocks have rallied, thanks to surging oil prices.

January crude did fall $3.28 to settle at $94.42 a barrel on reports that OPEC could agree to raise production at its next meeting.

Still, offshore drilling firm Transocean (RIG) continued its ascent. The stock jumped 6.36 to 135.75 in brisk trade Tuesday, good for an all-time high.

A few big leaders from the most recent rally also showed some resilience. Chinese search engine giant Baidu.com (BIDU) rose 5% to climb back above its 50-day moving average. Deckers Outdoor (DECK) touched an all-time intraday high, ramping up 10.67 to 143.81.

But for the most part, the pockets of the market that have fared best have been defensive groups such as pharmaceuticals and tobacco — typically not the kinds of stocks you'd expect to lead a bull run.

Elsewhere, the November Consumer Confidence Index came in weaker than expected. Also, the Chicago and Philadelphia Fed presidents both said the economic outlook for the fourth quarter and beyond remains uncertain.

The central bank will next meet on Dec. 11 to make a decision on interest rates. Although Fed officials have voiced reluctance to cut rates, traders in fed funds futures have fully priced in a quarter-point rate cut for next month.

Meanwhile, bond prices slid following Monday's rally. The yield on the 10-year note surged to 3.95% vs. 3.84% late Monday.
----------------------------------------------------------

Couple of bad news in after market hours.. Feddie cut the dividend in half and wells fargo another feary news....

Lets hope the rally rather pull up continue..

I believe...Abu Dhabi stake in Citi...is the first of many more investments coming from the Middle East.  And as much as many Americans will hate to see money coming from the Middle East because of fear...I believe they will be the savior of the Banks and the Economy.  They have so much money on the sidelines.  Are they seeing the end to high Oil prices, and they need to put their money somewhere??  (I'm being contrarian here).   Remember follow the smart money...they don't care where it comes from. 

Remember every strong bull market follows fear and extreme volatility in the market.  The American consumer is so much less important now in the over all global economy ...and it will become more so in the coming years...as more countries take on Capitalism and expand at extremely high growth rates.

I'm not calling a bottom at all yet...but I believe we're getting close. We shall see

Just my humble opinion.

Quote from: Houlahan on November 27, 2007, 07:49:12 AM
Miss Blondie here! I can't believe I am short C. I saw the news at 10pm EST last night. Thanks for posting the info. The market will rally today b/c of C! Go C! but wait til I can get out.

'Interestingly, Citigroup's stock actually closed lower, down $0.38 to $30.32. It turns out that Citi had to give the ADIA an eye-popper of a deal for the cash. Citi will pay the ADIA 11% per year, or $825 million, then allow a swap into common shares priced between $31.83 and $37.24 per share.
The 11% rate is almost twice the rate that Citi offers its bond investors, well above average junk bond rates (around 9%), and substantially more than the 7.25% rate that Countrywide paid Bank of America for its emergency financing three months ago. And the deal will dilute Citi's common stock by as much as 235.6 million shares. Ouch! No wonder the stock was down. ' - Source Navellier and Associates

Quote from: kslifka on November 27, 2007, 11:26:47 PM
I believe...Abu Dhabi stake in Citi...is the first of many more investments coming from the Middle East.  And as much as many Americans will hate to see money coming from the Middle East because of fear...I believe they will be the savior of the Banks and the Economy.  They have so much money on the sidelines.  Are they seeing the end to high Oil prices, and they need to put their money somewhere??  (I'm being contrarian here).   Remember follow the smart money...they don't care where it comes from. 

Remember every strong bull market follows fear and extreme volatility in the market.  The American consumer is so much less important now in the over all global economy ...and it will become more so in the coming years...as more countries take on Capitalism and expand at extremely high growth rates.

I'm not calling a bottom at all yet...but I believe we're getting close. We shall see

Just my humble opinion.

I agree with you on a number of points, especially that the end of high oil prices could be near, at least for near term.  We had about a 50% rise in what, the last few months?  And a tripling in something like 3 years.  Even if prices could stay high, it would be prudent for the OPEC countries to diversify those profits.  I think the commodity bull market also has some component of them diversifying into commodities also.

Seems like today the Citi news gave the bulls a leg to stand on to cause a bit of a short squeeze today, even though Citi sort of sold its soul lol and  went down on the day.  So yeah, could be that there are still a few more down days, I would not care as long as we go mostly sideways on average from here till a fed rate cut on Dec 11th, then head up, that would be a normal time cycle for an average correction.

Good points on C!
The media made me believe C would surge yesterday , but like you said it dropped. In my head, all I saw was bad news for C. They cut 45,000 jobs on top of all that neg. news. But I traded with my emotions. Lesson learned. I enjoy your thoughts! thanks

I thought historically December was a good stock market month? But this has been a wild and crazy market. I believe we will have a Merry Stock Market at years end.  Which is only a month away!

it looks like we have a strong up trend, so technically tomorrow could be a key reversal day. Iin order for it to be a key reversal day we need higher volume for it to be a strong signal and then we all need to be long. If this does not happen this could possibly simply be a short market rally. I hope that is not the case.