Thursday, July 23, 2009

More Caution For bulls?


Dear readers, the PCratio ( total) shows the curling of the pink oscillator up, which is even more cautionary than yesterdays configuration. Equity part is not yet doing that, but It culd be coming. In any case, market needs to prove that it is not scared and rally in the face of this to prove that there is nothing to worry about.

54 comments:

Mike Truong said...

Dear Boris,

I still have a lot to learn. Anyways I will try to maintain my subscription so as to have a feel for how you trade. So far I have only seen the long term bullish trades so i need to see the long-term bearish trades too so that I will know how to recognize the difference in attitude of tradings. The reason is that from my limited observation of the markets, bullish trade takes a while to get going while bearish trades are quick and brutal - thus the whipsawing.

Anyways I will remembered your words about leaving the emotional and social part of me in the closet when I setup a trade.

Thanks all,

Michael

boris said...

Dear Michael,
As you know My Very Dear Friend. We are Asset allocators. In some sense, we do not know and care about bullish or bearish markets. To the extent that we are looking at the GOLD/OIL ratio or SPX/GOLD ratio, we do not really care too much if either one of them is in the bull or bear market. We are in some , simplified sense, a pair traders.

Think of it this way, if we think GOLD is undervalued visavis the SPX we just will buy more gold with the money we god buy selling SPX.

I hope this is clear. You Know very well, that we do not short any market. We just move the money from one to anohter. So, Yes, by all means, one needs to be aware of BEAR/BULL markets in a given asset. Of course that pretty much means measuring GOLD in Dollars and SPX in Dollars and arriving at conclusions if we are in the bull or bear market. We are devoid from that thinking, but more important for us is this issue...


How is GOld Related To SPX
HOW IS GOLD related to OIL
HOW IS Natgas Realated to OIL

HOW IS GBP related to EURO.


THese are the qustions that occumpy us more than, the question , if we are in bull market now in stocks or not.


So, what is important in that sort of operation.

Believe me not much, but the Patterns we follow, like the Dolla/EURO projection or Dollar/RUPEE projection( which our Dear Indian subscribers got) or the DOLLR/CAD projection ( which our canadian subscribers got).

So, in essense, we just look at those projections and let them tell us how ONE SECURITY is related to SECURITY TWO and go from there.

To conclude , our sense bullish/bearish is a relative one and sometimes our action may not be clear when looking at DOLLR/XXX securities it maybe clearer when looking at XXX/YYY. Like we may have sold stocks and bought gold and it was not a statment about gold or stocks market against dollar, but it was only a statment about GOLD market verusu the STOCK market.

Thanks My Dear Friend for giving me an opportunity to explain this again.

I think i did this few times, but it is important to come back to it as many do not exactly, understand what ASSET allocation means.

It is, mostly, taking the conventional bull bear thinking in terms of DOLLARS and transfering it in the realm of Bull/Bear thinking in comparison to each other ( eliminating the Dollar as a factor)! In one's thinking

Good Trading My Dear Friend Michael

xerxes said...

Good Morning Dear Boris & Dear Michael & Dear John & Dear Ivan...

boris said...

Good Morning Dear Xerxes
GOod Trading My Dear Friend

xerxes said...

So far so good Dear Boris....the relic keeps powering north...the buck shriveling on the vine....

xerxes said...

Dear Boris...Nice gain for EURJPY today...Should have acted rather than talk yesterday; test, as you always suggest Dear Boris...

xerxes said...

From Bloomberg.....

"....under new European Union guidelines.....call for stress tests, the disclosure of impaired assets and the possible closure of unprofitable operations, the EU said in a statement today. The guidelines will be used to review lenders that received aid after the credit crisis prompted EU governments to approve more than 3.77 trillion euros ($5.37 trillion) to support banks.

boris said...

Dear Xerxes
When you start trailing ,
then trend becomes your friend.
You go as far as it goes(:-

That is nice

Good Trading Dear Xerxes

xerxes said...

They're tossing the trillions around euroland as well Dear Boris but they keep bidding EURUSD up....You'd think that PM's would be higher...

xerxes said...

....then trend becomes your friend...

You forgot the rest of the expression Dear Boris.. 'until it isn't' ...

boris said...

When the trend is not your friend, that does not bother those who trail with stops, Dear Xerxes,
That is the point of trainling stops to get out.

No trend is not your problem at that point.(:-

Good Trading Dear Xerxes

xerxes said...

Dear Boris...Did you hear the latest from Obama on health care reform...."Don't fear.....CHANGE"

boris said...

Dear Xerxes,
I do not fear the change any more
I discarded all my quarters and nickels and dimes(:-

Good Trading Dear Xerxes

xerxes said...

Dear Boris...260 firms reporting today....260 bullish reports spells ralllllyyyy :-)

Initial claims 15 minutes from now

Wanderer said...

Dear Boris,
Good morning.
Good trading.
Good day.
Thank you.

Bert

xerxes said...

Dear Boris...Some guest on Bloomberg says that there is a -0.98 correlation between equities and USD...tight....He said that Dear Ben pumped 80 something billion a couple weeks agao and then....booooommmm...
we get a rally and the buck sinks...

boris said...

Dear Bert,
Good Morning and
Good Trading to you
My Very Dear Friend Bert

boris said...

emini134 is on its way to you.
ENjoy Dear Subscriber

Good Trading all

xerxes said...

No emini yet Dear Boris

xerxes said...

Antidollar on the rampage again Dear Boris....

xerxes said...

Buck is gettin' smoked Dear Boris

xerxes said...

Are we going straight to heaven here Dear Boris?

xerxes said...

Remember this song by the Animals Dear Boris...
Sky Pilot, Sky Pilot
How High Can You Fly
You'll Always, Always, Always, Reach the Sky

boris said...

Dear Xerxes,
Stay with the trend.
That is a good idea,
Sometimes though it is a good idea to take profits
and We would galdly do that sometimes, as usally we get to repurchase the same shares for less later.

That is all to know.

Markets are not difficult.

Buy law sell high and wait to do it again.
Just keep the core holdings to hold you through
Good Trading Dear Xerxes

xerxes said...

Dear Boris...When did Wall Street move to Pamplona :-)

xerxes said...

I was thinking about 1050 to 1100 Dear Boris, by summer's end....Looks like by end of July instead ;-)

Mike Truong said...

Good morning everyone,

I am glad I got out or this is the ultimate sign of the top (me capitulating..:-) ). Anyways I will keep an eye out for you guys. Look like the 'sell in may and go away" is not gonna happen this year. Also this may be one of those year where the january effect will not come true. Like i said earlier, I don't like trading when fundamentals continue to be ignored unless all of the best economists I listened to are wrong..(roach, rosenberg, roubini, faber, etc..) I really would love to go longs but I can't find anything I like about this market at all.

Good trading dear friends,

Michael

xerxes said...

EURUSD dropped 10 pips...It's recommended to buy the dips :-)

xerxes said...

From Bloomberg....People want yield and there is 3.2 trillion in money market accounts...Investors will not reassess positions based on fundamentals till the 3rd quarter...

boris said...

Dear Michael,
Markets and fundamentals are more time out of synch than in sync, and that is probably understatement in coming years, which will be very different from last 25 years.

So, Again just like any other feelings , this one needs to be controlled. RECOGNISED for sure, but CTROLLED, by stops in the market.

That is only tool we have once we are in the markets. Take a position and think or actually have stops in the market.

Good Trading Dear Michael

xerxes said...

976 Dear Boris...How High Can She Fly?

xerxes said...

Dear Boris...

10yr/2yr spread increased some more so far today...record high? I think so...

Dear Ben is skeruuued Dear Boris....

What's he gonna do when the price level rises hard, the economy is in the tank and unemployment
keeps rising?

I know, he'll just lie about everything... (1) price rises reflect quality improvements and added features (2) GDP will be rising for sure no matter what, after all they manufacture the statistics (3) The unemployed are actually leisure shoppers enjoying the voluptuous life that is America......

boris said...

Dear Xerxes, SPX 976?

We donot know how it will go. All we know is that we took profits today , some more on another portion we purchased about 75 points ago.

SO, let it go. I do not care.
I will wait for my time to repurchase.

Good Trading Dear Xerxes

xerxes said...

Dear Boris...There are 3 fibos, right here, at 957.xx....Next stop would be north of 970 and then on to Dawson City Dear Boris :-)

boris said...

Dear Xerxes,
Thanks for reporting.

Good Trading Dear Friend Xerxes

xerxes said...

EURUSD and zahav are a bit exhausted Dear Boris, but S&P and zahav shachor refuse to budge :-)

xerxes said...

Dear Boris...pushin' 980 .... booommm

dimitry said...

ANTIDOLLARS are crushing without SPX.

boris said...

Dear Dmitry,
Stock Market supposedly is in the rally, because, CHINA is going to use all ANTIDOLLAR ever created on the earth ( OIL, COPPER, GOLD , SILVER etc.)

So,what gives in here?
Well , we don not want to be guessing. Just take the profit and let the things align again.

They will.

Good Trading Dear Friend DMitry

xerxes said...

Dear Boris...Equities rise, pension plans get liquefied, people buy houses and start flipping them once again, Dear Ben writes his memoirs entitled "They Didn't Believe"....

boris said...

Dear Xerxes,
We shall talk about that when it happens.

I do not see for a while
Perhaps some, but not much for a long time
Good Trading Dear Xerxes.

boris said...

More likely scenario is
that the foreight scam, that got rich on our cheap Dollars will come and buy American properties cheap from the hands of , by then, depressed and tired Americans, who have worked their entire life, to ceed the savings to a system that banckrupted them.

Good Trading Dear Xerxes

xerxes said...

Good Morning Dear Boris

xerxes said...

Nice inverted H&S on Gold daily Dear Boris looking at new all time highs if it plays...It's just waiting for your authorization :-)

boris said...

Dear Xerxes, Just so that people reading this blog do not wrong ideas, I am not bullish/bearish on GOld at this time.

Exact details are in our asset allocation writeup under the market report.
As far as your positioning, it is fine what we discussed todo.

Thanks And Good Monring
My Dear Freind Xerxes

xerxes said...

Just having a bit of fun Dear Boris :-) I'm sure everybody and his brother see the inverted H&S so it is unlikely to pass....

EURUSD vacillating between firsts so far today...

xerxes said...

“I’m skeptical about whether consumer demand can improve from here,” said Laurent Bilke, a senior economist at Nomura in London. “What’s important is that the free fall is over.”

Is it really over Dear Boris :-)

xerxes said...

The German economy may return to growth this quarter as a global recovery boosts exports and government measures to stimulate domestic spending kick in.

“Goodbye recession, hello recovery,” said Andreas Rees, chief German economist at UniCredit MIB in Munich. “The chances for growth in the third quarter are good.”

xerxes said...

Hang Seng over 20,000 Dear Boris, surging over 6% this week alone and the highest since the Lehman debacle

xerxes said...

Longest winning streak for European stocks since 2006 Dear Boris

xerxes said...

Dear Boris...A surfeit of positive news this morning but S&P is down a smidge...Does antidollar sink today?

xerxes said...

...In any case, market needs to prove that it is not scared and rally in the face of this to prove that there is nothing to worry about.....

It rallied Dear Boris :-)

boris said...

Dear Xerxes,
Good News is Good News Sometimes.
And Sometimes, It means bad news coming.

In any case, we are going to new post.

Thanks Dear Xerxes
My GOod Friend

xerxes said...

Are we gonna do the daily high run on EURUSD today Dear Boris...Hourlies are tight and 4 of the 5 were bowled over already...