A Panicky Trip To Mr. Neckline Neighborhood Very Likely On Monday

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

The stalemate in the US Congress over the debt ceiling (a totally manufactured crisis) is far from over.  Even when they manage to pass a bill to increase the debt ceiling, I wouldn't expect anything other than a one day relief rally in indices.

Chances are good that indices continue to bleed lower for foreseeable future, at least until Captain Ben starts flying his helicopter again (QE-III). Even then, I wouldn't expect to see the same reaction in indices as we saw from late Aug 2010 to mid Feb 2011 in response to QE-II.  The market response to QE-III would be very muted imo.

We're in a bear market and indices will continue trading lower.  I think as soon as the debt ceiling issue is put to rest, we would start getting signals from the Fed that they're "standing ready with more quantitative easing" in order to prevent a crash in markets as more and more signs that economy headed toward another recession (double dip) emerge.  Nothing short of  a major overhaul of entitlement programs and tax code would turn this bear market into a bull market. What are the chances of such an overhaul anytime soon?  Zero to None.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

August 2 Might Come And Go Without A Raise In Debt Ceiling

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

During the last 4, 5 trading days, Big Money has been unloading long positions hand over fist. I've been posting about that on my blog and face book wall. To me that's a sign that this is not a temporary thing and indices could go substantially lower.  If this was a temporary sell off, Big Money would have sold future contracts of indices against its long positions instead of closing its long positions out right.

Per my plan I added more shorts today to my LT Portfolio.  Futures showing SPX at 200D SMA now. Tomorrow could get gully if it becomes clear that Reps can't even pass their own bill in the House. That would mean August 2 might come and go without a raise in debt ceiling.  If Reps can't get anything done tomorrow or their bill fails, SPX could sink down intraday to the Neckline, mid1260's. I would cover my shorts should SPX get there.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Leaders RUT And DJT About To Test Their 200D SMA

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

RTS covered SWKS and sold short UAL in its place today at the open (late post).

My Long Term Portfolio

Market sold off into the close on heavy volume.  RUT and DJT are about to test their 200D SMA, very likely tomorrow.  A close below 200D SMA for RUT and DJT  would be very bearish, signaling the high likelihood of other indices doing the same.

My plan is to add more shorts tomorrow as indices bounce higher early in the day.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

2012 Presidential Election, That's What's All About

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

The big fight is not over how much to cut spending or raise taxes.  The big fight is about 2012 election.  Reps want to keep the debt ceiling issue alive until election by passing a bill that raises debt ceiling in multiple steps each requiring more debate and voting.  Dems want to pass a bill and put this behind them until 2013. 

So long as this fight goes on, Market will keep on bleeding lower.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Bears Are Taking Charge

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

All five major indices (DJI, NAZ, RUT, SPX and DJT) put in a lower high, a lower low and a lower close.  Momentum has shifted now and I believe bears are taking charge again.  Tomorrow they will try to drag indices down with vengeance.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Fasten Your Seat Belt, Rough Ride Ahead This Week

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

The sharp rally in indices since last Tuesday did little to move the breadth indicators.  New highs shrunk for NYSE and Nasdaq as indices went higher and technical divergences abound in daily and weekly charts for all indices.  The pattern is consistent with a developing top.

So long as SPX is trading below the primary down trend line (orange), there is no reason to be long in this market.  Indices would bleed lower as long as there is no resolution to the debt ceiling crisis.  And even once a compromised and very likely idiotic agreement is reached, the chance of indices selling off is substantially higher than rallying.

  

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Who Is So Wrong? Stocks or Bonds?

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

Two things are happening :

1. A majority of companies have reported excellent earnings and outlook.
   
2. Market is still counting on some sort  of "debt ceiling / spending grand bargain" to be agreed up on soon.

I think the stock market is so mesmerized by so called "grand bargain" that it's not even willing to consider other outcomes including a default.   The bond market, however, is not that naive.  Yields on US treasury notes and bills are currently just about the same level as they were back in Oct of 2010 when the financial world as we knew it was about to end.

I don't know what is going to happen, but it seems to me being long in stocks and indices now is very risky.  My plan is to stick with my short positions so longs as my signal, SGS, is short.   SGS would turn neutral if the primary down trend lines in major indices are broken (orange line on the SPX chart above), and then would go long if major indices put in new highs (1370 and higher for SPX).

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Budget / Debt Ceiling Grand Bargain Would Be Extremely Bullish

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

Today Market rallied on the back of short covering of future contracts of indices after Obama's press conference in which he gave hope to a budget / debt ceiling grand bargain.  If a deal is reached (when pigs fly imo), Market would rally to at least  SPX 1420-1430 within the next couple of weeks.  If a deal is not reached by end of this week and European financial crisis isn't resolved either, selling would continue to at least SPX 1250.  I'm still holding short positions and planning to add more if SPX goes below 1300.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

You Can't Have A Bull Market Without Financial's and Semi's

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

Today, all major indices put in a lower high, a lower low and a lower close.  Selling very likely continues tomorrow with SPX probably closing below 1300.  That would significantly increase the possibility of 200D SMA test sometime this week.  Reviewing data tonight, I noticed financial's and Semi's are totally collapsing.  It doesn't look good for the bulls.

I'm still short and planning to add more shorts if SPX dips below 1300.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Something Is Up ...

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

Friday was an interesting day.  While indices were kept in a narrow range for the most of the day, Big Money was busy buying energy and energy service companies indiscriminately.  I think Big Money expects oil to go significantly higher.  Maybe Big Money thinks that the Fed is going to bring out QE-III shortly after the debt ceiling issue is resolved, causing further devaluation of our dollar against commodities, specially oil and precious metals.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

SPX To Test 1300 Tomorrow

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

For the third day in a row, SPX lost its early gain and closed the day substantially lower.  SPX is now trading below its 50D SMA and very likely will test 1300 support tomorrow.  A close below 1300 would make a test of 200D SMA, around 1275, very likely sometime next week.

I added more shorts today as SPX went under its 50D SMA.  I am planning to add more when SPX starts to trade below 1300, hopefully tomorrow.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

A Test Of SPX 50D SMA Is Very Likely Tomorrow

SGS is Short (as of close of 7/12/2011)
RTS 20110713 Short Portfolio (Bench Mark)

My Long Term Portfolio

SPX will very likely test its 50D SMA tomorrow.  A move below 50D SMA and the primary down trend line (orange) could accelerate selling and push  SPX to test 1300.

I scaled into short positions in my long term portfolio today.  My plan to add more shorts once SPX moves below its 50D SMA, probably tomorrow.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

SGS Is Short

SGS is Short (as of close of 7/12/2011)
New RTS 20110713 Short Portfolio (Bench Mark)

Following 10 stocks will be sold short tomorrow 7/13/11 at the open:

RIMM  FNSR  CIEN  NVDA  SPLS  SWKS  AKAM  AIG  MS  CCL

My Long Term Portfolio
My Short Term Portfolio

SPX closed below its 50D SMA today.  It also back tested the recent primary down trend line (orange) and closed above it.  A close below that trend line would be very bearish and I think it very likely happens sometime this week.

I'm planning to scale into short positions tomorrow.  I will post details later tonight.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

SGS Turned "Neutral"

SGS is Neutral (as of close of 7/11/2011)
RTS 20110404 Long Portfolio (Bench Mark)

All long positions in RTS 20110404 will be closed (sold) tomorrow at the open

My Long Term Portfolio
My Short Term Portfolio

Indices sold off sharply today. Big Money was busy unloading his longs positions, specially his small caps.  Per my plan I liquidated my LT portfolio early today.  My plan now is to start to scale into short positions as soon as we have a close below 50D SMA for SPX.

SPX dropped out of its down trending price channel (blue) and into a much steeper down trending price channel (orange).  It also tested its 50D SMA with very little bounce.  Tomorrow, SPX very likely retests its 50D SMA again and could  close below it.  The only thing that could save the bull run is fantastic earnings and guidance by companies. Of course, we should never underestimate the power of the QE side, but not likely until this fall.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Show Me The Money Or Else

SGS is Long (as of close of 4/1/2011)
RTS 20110404 Long Portfolio (Bench Mark)

My Long Term Portfolio
My Short Term Portfolio

Anything short of fantastic earnings reports and Q3/Q4 forecast next week would cause indices to go down very hard imo.  I have my finger on the trigger to unload my LT and go100% into cash.  Unfortunately Reps see derailing and sending the economy into a deep ditch as their only chance of winning the 2012 election. 

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Fundamentals Always Come Out In Charts First

SGS is Long (as of close of 4/1/2011)
RTS 20110404 Long Portfolio (Bench Mark)

My Long Term Portfolio
My Short Term Portfolio

Oscar Carbonni who is a trader based in Vegas often says: "Fundamentals Always Come Out In Charts First".  I think indices are telling us that the employment data tomorrow is going to be better than expected.  If so, we should see new highs for NAZ and possibly RUT early in the day.  A big rally tomorrow would push indices to overbought levels and we could see aggressive profit taking before close.  I'm planning to sell out of the money covered calls against my long LT positions early in the day.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

DJT Closed At An All Time High

SGS is Long (as of close of 4/1/2011)
RTS 20110404 Long Portfolio (Bench Mark)

My Long Term Portfolio
My Short Term Portfolio

DJT, a leading index, closed at an all time high today, signaling that other major indices are very likely to follow and set new multi-year highs soon.  I believe Market is making a base to rally substantially higher.  All dips are buying opportunities imo.  The only wild card is debt ceiling legislation in the Congress. I think it will be passed eventually, but rough days might be ahead as politicians do their usual song and dance.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Big Money Is Buying Lock Barrel And Stock

SGS is Long (as of close of 4/1/2011)
RTS 20110404 Long Portfolio (Bench Mark)

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My Short Term Portfolio

Big Money is buying stealithly while keeping indices flat.  I think Big Money is smelling something big, maybe Big Money is about to get a big gift from Obama as he cuts a deal on debt ceiling with GOP.

I scaled into longs for my LT (first buy of 3) earlier today.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Earnings And Mennisota

SGS is Long (as of close of 4/1/2011)
RTS 20110404 Long Portfolio (Bench Mark)

My Long Term Portfolio
My Short Term Portfolio
 

Big Money never sold his long positions as he dragged the indices down from their May 2 highs to June 16 lows by aggressively selling their future contracts.  Since June lows, Big Money has been adding more longs and will continue to do so because he expects excellent earnings reports and positive forecasts by companies.  I expect the rally to continue until late July and new highs for US indices are very likely sometime this month. I'm planning to scale into long positions again by buying dips.

One possible spoiler, however, could be what's happening with the debt ceiling.   For now, Reps are threatening "government shutdown" and "government defaulting on its debt obligations". That's an empty threat because they know well the consequences of a government shut down and default could be another financial meltdown, but I think that threat becomes very real if things in Minnesota, where the state government has been shutdown for about a week now, go Reps' way.  If Reps in Minnesota get the public behind them and force more spending cuts on the poor and tax breaks for the rich, GOP in DC would be more willing to do the same at the federal level.  And if they let the government default on its debt obligations, we would see VIX testing its 2008 highs.

Big Money is watching Minnesota.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.