Good morning OJ re >>Whats up???? any news on your trading signals????
Well as you know, I went long yesterday--reversing from being short--made 12 points or $6K per contract on the short trade after having those fantasies about the market opening limit down -- 15, 30, 45, and even 70 points:) Anyway, glad that it was a profitable trade.
I think that we are at a critical juncture here--the sentiment has turned nicely. Lots more of bearishness and caution, The perma-bulls--are bearish, wanting to sell into rallies and so on. Even you, the ultimate perma-bull, and Iqbal who cannot refrain from painting the the rosiest of scenarios even as every recommendation of his has been decimated, have turned cautious. I think that we may have one more really sharp leg down to the 7000-7100 level--may be if/when the US bombs Iraq--which will turn sentiment even more bearish-- and that should set things up for a decent rally. How far up we go thereafter, I have no idea---but the quality of the next rally from whatever lows we establish should tell us a lot about whether this bull is still alive. The momentum on the downside has abated somewhat--which is encouraging.
Now if sentiment turns even more negative and the market continues to decline unabated, one cannot rule out the possibility that we may have entered a bear market--does not mean a BigK--but it could be a that we will see declining prices until valuations become more reasonable in relation to forward earnings.
If I had to hazard a guess, I would say that the bull market is still intact. I got creamed on my long positions and even though I was hedged it did not compensate for the declines---my only consolation is that I sold most of what I had, into strength, in the summer while the euphoria was at its height. I was 90% in cash in early August when the market peaked--but went back in to the tune of 30% in September--and came to regret it. The odd part is that I kept posting that there were momemtum failures on the upside at that time--Bob Wallace and I had several exchanges about this--but did not do anything to exit the market. Ah well, such is life.
Seriously though, I really believe that those who use this opportunity to build a portfolio of quality stocks will be richly rewarded in the future. I still have not added to my equity positions, but I am looking to do just that--some stocks look almost cheap at this point and with tax-loss selling due to commence, it could get a whole lot cheaper. If things look right to me--I should be 100% long by the end of the year--with insurance for the downside.
As far as my futures positions are concerned--the signals are mechanical and my trading is mindless. The only thinking that occurred was when I developed the system.
Take care, my friend--getting to know you has been one of the more rewarding aspects of participating on SI--I mean it. |
