Saturday 9 November 2013

Depressed bears

For the few remaining equity bears out there, today was just another reminder of what QE-pomo means for this twisted market. Whilst the US federal reserve throw an annualised one trillion of new 'benny bux' money at the US capital markets...any 'significant' decline is simply not possible.


sp'weekly4 - hyper-bullish outlook - into 2015/16



sp'weekly8 - mid term bullish outlook


Summary

For many of you out there, I realise this was just another depressing and disappointing end to the week. After all, Thursday's drop of sp'23pts was pretty impressive, not least with the Trans/R2K both getting smashed lower.

Yet, we have closed the week near all time historic highs..and the weekly charts - which were looking a touch vulnerable yesterday, are now right back to outright bullish.


What am I doing?

I did get one message earlier today, noting that a prediction of mine never worked out. Certainly, I had been looking for the sp'1735/30 zone to be hit.

To clarify, I am NOT shorting this market. I have..and will continue to state, I believe this market is effectively untradeable on the short side. Trying to grab 10, 15..even 25pts of downside is overly difficult in my view..and is simply not good on a risk/reward basis.

I have ZERO intention of shorting the main indexes (along with long VIX) until late spring 2014. Even then, trying to catch a late spring/early summer top will be damn tricky..not least for the option players who face the relentless problem of a ticking detonator clock.

Lately, I have done a few minor trades, but generally, I'm more than content to leave the indexes well alone.

I'm pretty sure we'll see a multi-month down wave next year...probably on the order of 17/22%..and that will most definitely offer great opportunity for the bears. It sure isn't spring yet though, and indeed, I'm generally a mere spectator on the sidelines.

After all, I am still inherently a 'Permabear' in trading style, but what I won't do..is get ground down to dust, before the eventual giant monthly cycles start to rollover.

I hope that clarifies things.

Goodnight from London
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*weekend post, late Saturday, on the US monthly indexes
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Video from the legendary Bill Still



A great reminder to many that if you strip out the QE 'new money', the US (or much of the EU/Japan) never really exited from the recessionary collapse wave of 2008/9..