Don, I value your Index Updates, but of course I make my trades on my own volition. You might even be happy to know that last night I read your comments where you stated your opinion based on your T/A. I felt that the market had probably already interim bottomed, but really I had no clear conviction either way, so I did not initiate any trades. Like I told Patrick Thursday around noon or so EST, as of the previous day's close I saw that the stochastics were saying up, but MACD was showing bearish down trend. Personally I have thought that ever since the initial breakthrough above 9,000, the market would initially dip, recover quickly, and then remain more volatile in % wise daily moves, but move sideways and/or trend slightly higher. This seems to be what is happening. I'm remembering also that at least a couple weeks ago (pre-9000) you were saying that you thought the market could go to 9300-9400 before this two-month-plus rally would peak. I have agreed with that, for no reasons I can easily explain. Perhaps it is in part that the market never seems to do things in exactly the same way twice, although there are similarities which are valuable to take note of (like just how long a rally can last -gg-).
I don't think that, in the past 12 months anyway, the market has ever simply plunged abruptly and quite nastily from a peak. Last August 7th, look how long the market lingered before finally, after much easily observable increased volatility, fell off the cliff on Oct 27th, or was it the 29th. Last August the market went above 8,100 or so very briefly (and only intraday or for one day). So it kind of stands to reason that, particularly when you think of the giddy atmosphere today, with even the slightly cautious bulls being proven too cautious, it stands to reason that we won't stop on 9,100 intraday and then that's it.
I'm struck by a IBD "investor's corner" article a few days ago, showing how to spot blow-off tops in individual stocks. They used YHOO as an example. They gravely noted that the stock had went up 10 points in one day. Surely a blow-off top, right? Maybe so, but then how to explain the 17 point gain a day or two later? Another blow-off top? Let's see: I thought "a" blow-off top meant like one day, identified by crazy things like 10 pt advances -gg-.
We're definitely running on helium, and we're not far away. I have noted that Bonnie Bear has prudently resisted the urge to buy puts; I believe she sat out "Plonk's plonk", and said she was waiting for the week after April Expiry. When Bonnie Bear is that cautious, it should put a goodly amount of caution and healthy fear into the potential put buyers.
Now that I've said all that, I'll admit to buying just one in the money S&P put right at the close. I actually did it against the little voice's advice, because the weekend that is here won't be healthy for the time value, and also because I really do suspect that we will see 9400 on the Dow before we see 8700. So, I'll deserve any losses for being too trigger happy. But wow what a rally! 14 pt on the S&P -- was just too good to pass up setting at least one spike into. |
