Fun Times!
Closing Prices From Yesterday (friday)
Today’s Number(s)
Yesterday and Today
Yesterday
On Thursday night’s “Friday’s Morning Update” I stated that the market was looking to open below SPX 1,900 and this was going to be a buying opportunity. It never materialized. Instead of opening down 10 points we opened up 5. Yet by the end of the day it was still a good buying opportunity no matter where it was purchased.
The fears of the US bombing parts of ISIS in Iraq were outweighed by an administration whose typical “too little – too late – more golf – Get Jay-Z here to preform” reversing and looking almost Presidential. This needn’t have happened (ISIS taking control) but the overall mood was “At least he is doing something”.
A broad based rally took place after 1:00pm eastern when reports that Russia was done with their “military exercises” on the Ukraine boarder. This sent the RSX (Russian Index) up 2.5% and the US markets up over 1%.
TODAY
I have been getting hammered by naysayers with their own opinion telling me that the market is overdue for a correction and this is it. I am not saying I am the Nostradamus of market direction. If I were I would have never learned options and just traded futures my whole life. But I feel slightly vindicated in my statements that the recent sell-off was simply more longs getting upset that they have a month to sell the market at 17,000 and didn’t.
One can tell a great deal of directional traders (as opposed to people who know how to hedge and actually welcome downturns) we getting out of the markets. How? The thing that sent the initial snowball of selling down the mountain was bonds selling off. People feared higher interest rates and a change of opinion on the Fed’s stance. Knowing that interest rates are integral in determining share price, people sold out of shares and bought bonds (for safety and to park cash).
So from here?
It is hard to say, and I am sure I will get some flack about this next statement too. But…
I really think this last sell-off was BS. It was fear of a market at all time highs, a weak presidency mired in scandal and inaction. It was also helped by a media that biases every newscast with negativity. We could solve world hunger, AIDS, and war in a month and the media would only report about all the jobs lost in nursing because of the lack of dying people.
So I think there is a better than average chance that this last sell off was just like the other 10 we have had in the past three years (go back and look). Fear that the world was coming to an end, only to be BS. Recall back last summer when the government shutdown was taking place? We sold off about 1,000 points as Da Prez (Obama) got on television and said a government shut down would have towns with no police or fire departments. Teachers would be fired. Cats and dogs would live together (I stole that from the movie Ghost Busters). And what happened?
I said it was BS and time to buy. I specifically stated we would not only touch 17,000, but go beyond it. I still think we will.
THEN?
And then people will have been so accustomed to buying every dip (as they never can get hurt), that buying one of the next dips will be the end of them. It would be perfect storm.
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Overbought market because low interest rates prevents money going anywhere else
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Extreme complacency
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Trust that every drop is a buying opportunity
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Over worthy faith that one person in the Fed can carefully orchestrate the world’s economies like Leonard Bernstein does a string section.
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A bubble that people are ignoring.
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Fake growth of corporations (lower estimates and then beat the lower estimates).
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Etc.
But POT people….let’s have fun today. I am going to show another long overdue Random Walker
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POT is held each Wednesday night at 7:00pm eastern.
A BUSY TWO WEEKS. A separate update is coming now that we have gone from long volatility to short volatility.
Contract the office at 1- 855 – RWT – 0008 for more details.
Too True To Be Funny
And I just thought they were giving me sugar pills instead of anti-depressants.
I hate to disagree with Ron Paul, but after 2 full hours of investigation the White House declared it an accidental downing. I know more time goes into investigating a stolen tricycle, but this is the government talking. They would never lie about this, MK Ultra or the Gulf of Tonkin.
Attorney Stuff
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