{+++}There are those that think the market could go to 1200, maybe 1300 by year end, maybe they are right. I’m old school, and although we are in a period of time that truly is “different this time” I have to look at certain technicals and market internals, I have too. The only thing that pisses me off more than losing money is being wrong or getting the feeling that maybe I’m missing the point on a topic. Feeling like your the only guy in the room that doesn’t know the joke can be disconcerting.
I say this because that is how I feel right now, it doesn’t help matters either that we are seeing our stocks get stopped, for that I feel miserable. I’m not a perma bear by any stretch and I go long all the time, but when charts look like shorts and they go higher consistently it makes me think twice that maybe I’m missing something. For those of you that have followed me for almost two years now, you know I was a lone wolf in 2008 and early 2009 as I was all short, yes, at that time I was a big bear. Every time the pundits and the crowd thought we “bottomed”, I just shorted more, all financials and,commodities and materials. The profits were obscene, many followed and made a fortune too.
I am not saying that we will ever return to that period, even I don’t believe that, the Armageddon scenario is probably off the table-at least for another thirty or forty years. We have basically nationalized the big banks even though we call it something else, the great investment banks that I worked for, like Bear Stearns and Lehman Brothers are now out of business. My point here is that I am old school to a degree, things like volume, advance/decline,and market breadth matter to me. Sure I can be the guy that says “just buy the tape it’s going up”, that’s what good traders should do, and most of the time I follow that thinking, but this is different.
Today for example the decliners led the advancers on the NYSE by 500, decliners led advancers by 900 on the Nasdaq and volume was anemic. Also keep in mind that stocks like BAC,C, FNM and FRE account for 20% of the daily NYSE volume now. All are broken government controlled entities. Also keep in mind that in real terms you could make a case that the DOW is really at 7500 when you take into account the decline in the dollar. Weird signals indeed, but I have twisted DNA and I am the first one to admit it.
I guess what I’m trying to say is that the market could blow through 1100, close there, and establish that level as support. What I REALLY think though, is that the market is due for a fall. My plan now is to wait a bit, watch the market even closer, (if that’s even possible)and then plan my attack, it could be very short or very long, I promise you that it won’t be anything in between.
I don’t have any new additions tonight but promise that there will be activity intraday tomorrow if anything breaks.