Flattish Market But It Felt Crazier To Me

{+++}We reviewed a bit last night and some more mid afternoon today so I wanted to give you my view of what could happen short term, and some insight on me, not CNBC or the kool aid drinking pundits, but me. They are usually wrong and I am usually right so here goes.

The market would not close above 950 again today, and as I said a week or two ago in the Sunday post, the market is in a range between 875 to 950. We punched through 950 but didn’t close there  we had a shot today but Mr. Market decided to back off. It is more of a psychological level, but psychology is a very big part of how I view things, and is a huge dynamic in my thought process. What you may not know about me, if you are new, is that market psychology, sentiment and the macro picture play a big part in my decision making. I may place my trades for us on a strictly technical basis but it’s after a process of looking at many things. The point I am making is that a close above 950 with good volume is a very good thing for the market at least near term. If we break out through 950 and CLOSE there, they will break out the kool aid, the always wrong pundits will come out of the woodwork calling for a move beyond 14,000 DOW, and CNBC will get giddy beyond recognition.

I am intrinsically bearish on a macro level but am not a fool and will trade what the market dictates, never let your gut or heart get in the way of your placing bets in the market, the market will always win. I will change my mind fast if I think we got caught leaning the wrong way, hopefully that won’t happen often. I take profits fast, sometimes at my own peril, but the Street is littered with folks that used “hope” as a strategy, that’s not me, especially in a market that in my opinion is still  fragile at best. I think Jesse Livermore said it best when he said  he made money in the market because he sold early.

I live the market, from 6am to bedtime, I read everything and look at tons of charts, I’ve fallen asleep with my laptop on my lap. I love what I do and I hope that come across. I won’t always be right, no one is, but I will always put a 100% effort into my final calls. I have some of the smartest people on the street in my Rolodex, guys I was in the foxhole with for 25 years on the street, most of them made a fortune last year when those around them got killed. Based on that, I see much that most don’t, I view that as a lethal weapon.

At the end of the day it’s all me and I will stand by every call good or bad.We currently are  long some beautiful charts, but I have seen some picture perfect charts turn bad in a hurry. One example is when I started this site, the short was UTHR, it was a beautiful looking short, it had every characteristic of a big money maker, we got stopped out and the stock ran 20 points. I hate when that happens but it does happen.

Many of the successful traders I know are keeping  tighter stops than ever, just in case we fail at 950, they don’t “believe” the move we have enjoyed, but are still ‘long’ the move. Based on that, they are a hair trigger away from hitting the sell button, I think they are a microcosm of the rest of the investing world too. Keep in mind, to further my point, they are also a hair trigger away from hitting the buy button if we move through 950 on volume. Don’t misunderstand me, we don’t have to explode through that level tomorrow, a sideways low volume pullback would probably be bullishly constructive, I just want you to be cautious and careful. The S&P has rallied almost 40% off the low, a big move, so caution rules.

I’m reluctant to put out any new names tonight as I want to see how the market flows here. Volume has been weak and that concerns me but that can change quickly, either way.

If a gun was put to my head and if I was asked what I really think, I would say this. The market is driven by momentum until it’s not, hedge fund managers run in a pack mentality and they are all chasing the same names, commodities and materials, so unless there is a material change in the greenback, this trend should continue. The month and quarter end in two weeks, it is also mid year, unless they all decide to take profits (could happen, but I doubt it) so they could make a big run for the roses over the next couple of weeks. If I’m right, and this happens, I will get short on June 2nd in a very big way.
Why my font just changed I have no idea.
Let me know your thoughts .
Previous Post
Update 6/11/09 15:00
Next Post
Happy Friday

Recent Articles