Are We There Yet?
- Posted by UpsideTrader
- on November 13th, 2012
“The road to hell is paved with good intentions” -Proverb
This tape is a mess. We get a ten, fifteen handle rip, 2:30 rolls around and they kill it. All gone. Scared and uncertain tapes act this way. $AAPL managed a whopping eight cent move today, $GOOG looks like it’s hanging by a thread and the $QQQ’s look like drek. A trader texted me today, said he thought he saw a double bottom on the $SPX. I said “good luck with that, I’m seeing dead people”.
Fact is maybe it did, fact is, a lot of what I look at is really oversold. Stochastics and relative strength indicators are in the dirt on many of the indexes and stocks. That’s when I like to buy things. I’ve been trading $MLNX, $NFLX and $SRPT & $BOIL pretty much all week with decent success.
The folks at McClellan had this to say this morning.
“Tax strategy selling is likely to be a big factor. The current capital gains tax rate is 15%, but starting in 2013 it will go up
to a taxpayer’s individual income tax rate, assuming that no deal gets done in the remaining days of the lame duck Congress.
So a taxpayer who is now in the top (35%) tax bracket, and who can reasonably figure on seeing a 39.6% rate next year , has a big incentive to sell now if he has any capital gains to harvest. Shares of Apple Corp. come to mind. So as the debating points go back and forth in Washington, DC leading up to Dec. 31, we can figure on a lot of people doing some trading for reasons other than valuation.
From an overall market standpoint, that shouldn’t matter. Somebody who sells $100,000 of one stock will probably turn
around and buy $100,000 of some other stock, especially if it is a mutual fund doing it. So the net effect is theoretically zero.
But when indexing gets involved, and when Apple has a huge pent up capital gain for a lot of investors, then we can see shockwaves from selling and rebuying until 2012 comes to an end.”
Anyway, it’s has been a “money bet” getting long when the $SPX craters 100 points and that’s what I’m doing.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Joe was on Wall St, for twenty five years and his career took him to the retail, institutional and capital markets... More »
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