Posts tagged Goldman
The Bears Are Back…
Apr 30th
Great day to be a bear, as the market sold off today, erasing yesterday’s gains. Most of the fear was based on the news released that Goldman Sachs could face criminal charges too. Originally, they were just civil charges… which is no big deal to Goldman, because they have plenty of money to pay any fines.
But criminal is another story, as somebody could go to jail. That’s what I’d love to see, but I think it’s more smoke and mirrors then actual arrests.
I’ll do a weekend post that will be more in depth, with what I’m seeing for next week. I do think we will bounce up on Monday, at least in the morning. That’s assuming no more negative news is released over the weekend. That’s the wildcard that no one can see.
Anyway, have a great weekend…
Red
Apple Fails To Rally The Market…
Apr 21st
After Apple blew out earnings estimates on Tuesday evening, you would have expect a big rally on Wednesday. But, it didn’t happen, as this time the Apple was rotten. Apple clearly is the leader in the Nasdaq, and carries more weight then all the other stocks in the tech sector. But even with it’s overnight jump of 15-20 points, the overall market didn’t rally up huge like you would have expected it too.
Most people would have expected a 100-150 point Dow move up, with Apples’ great news. Since Apple carries so much weight in the market, this is clearly not a good sign for the Bulls. Who is left to rally the market now, if Apple couldn’t do it?
I’m really seeing more and more signs that this market is going to fall very soon. I’m not going to stay that the “Top” is in, but the odds are much higher now. Light volume is about all that can save this market from falling. If they can keep the volume light tomorrow and Friday, then they could take out the current high with some fake jobs numbers. That is something that they can easily fake, as earnings on all the various companies is a little tougher to alter.
Looking at the 60 minute chart, it sure looks like it is ready to fall. But light volume rules as the PPT can easily push up the market when there aren’t any sellers to stop them. This Goldman Sachs issue is about the only thing I can think of that could cause some serious selling.
Many people and large institutions are currently trying to get out of Goldman, as they don’t want to take a chance on whatever outcome may happen from their fraud charges. This will put constant downward pressure on any rally attempts that Goldman has. However, I think someone is going to hit the panic button if the rest of the market starts selling off.
I don’t know if it will happen this week or not, but you can just feel the tension in the market, as the tape struggled up some, down some, up less, and down more… all day today. Just like animals can smell fear, I think the traders are now smelling fear. I don’t think it’s going to be too many more days before the panic starts.
They will wait for the jobs tomorrow, and Microsoft’s earnings after the bell Thursday. If that data does show some real improvement in the economy, I think the serious selling will start asap. We could have a Black Friday? I don’t know how good or bad earnings will be for Microsoft, but I can tell you that most people will say that “Vista Sucks”, and Windows 7 is just Vista part 2.
And since Apple is their biggest competitor, who just blew out earnings, what’s the odds Microsoft will blow them out bigger then Apple? Remember, Apple couldn’t rally the market today. How is Microsoft going to rally the market… without any new gadgets like the iPad? Is Windows 7 as big or bigger of a money maker then Apple’s iPad? I don’t think so.
That leaves it up to the Jobs numbers to be outstanding, causing another rally. Everywhere I read, more and more people are stating that they don’t believe the numbers to be accurate as the government lies so much now. Nobody believe anything they say or do now. So, if the numbers are too good… will the market believe it? NO, of course not. And if the numbers are bad? Just another reason to sell off and take some profits.
You put together the NO Win Situation with the release of the Jobs data tomorrow, along with the high odds that Microsoft fails to beat estimates enough to justify a continued rally, and throw in the Goldman Sachs issue… and I’d say the odds are very strong for a sell off to occur.
And since Technical Analysis doesn’t seem to work too accurately by itself anymore, I’m leaning more heavily toward the “overall” feel of the market, and what news events are coming out first… then see if it matches up with the TA’s. Right now, they do match up. The TA’s have been showing overbought now for quite awhile. We have just been waiting for the right news event to trigger it. Will it be the jobs data and Microsoft? I think it’s the bears best shot.
Red
Let’s party like it’s 1999!
Apr 12th
I guess the market will never go down. Good Times are here again as the Dow reaches 11,000. Next up… 12,000 — with 25% unemployment, instead of the 17% we currently have. The more people are unemployed and underwater on their house value, the better the economy… right?
That’s what the media is feeding the unsuspecting pigs (I mean public). Get them to borrow their last dollar from their maxed out credit cards and buy, buy, buy! Don’t miss the rally, the bull is just starting… so says the media!
At this point, I see no way to make money shorting this pig! It just keeps getting fatter and fatter. How much slop can this pig eat? Apparently enough to go up another week… or month, or year? Who knows? I’ve never seen such a huge disconnect between the “real” world… which sucks right now, and the “twilight zone”… in the market.
Unless the earnings are really bad this week, and I seriously doubt it, the market will probably just trade sideways to the usual slow grind up. I feel I like I’m on an old dark century torture table, that slowly stretches my arms and legs… one notch at a time. I can hear my bones start to crack, as the Obama Gangster Gang smiles and laughs as they slowly rotate the wheel, and the rope tightens as it pulls me a little more apart.
It would be nice if the ropes would snap, and free me from this torture table, but I just can’t see any reason for the market to fall this week. Although I can’t find any technical reason to go long at this point, (the only reason you really need is the fact that the printing press is still going strong). Without the mass printing of our money, which is then given to Goldman… who pockets half of it, and uses the rest of it to push up the market… this market would have corrected a long time ago.
However, nothing really matters as long as they have tons of free money to buy up the market. It’s not going to fall, until every bear is dead. Someone sent me this chart showing the extremely low level of bearishness in the market currently, as it’s at 18.9% now… with 48.9% of the people bullish.
The 5 year low was 15.6% bearish, and 62.0% bullish. So, I guess we have a little ways yet to go? It seems that we are going to head up to 11,816 dow first… before rolling back down to 107.38 spy. So, I’m going to go long here with every last penny I have… (about 6 cents, as I held back the money I got from pawning the wife).
You know, if there is one thing I can say, that’s 100% accurate and true… is that “This market is really wearing me out!” I think I’d be better off as a “Buy and Hold” retail investor right now, as everything is smelling rose too them presently. Of course it will eventually be their turn on the torture table, but right now it’s my turn… and my poor old body can’t take too much more of this torture.
Just kill me and get it over with! Stop with the slow grind… day in and day out! I can’t take the torture anymore. Rally up to 12 million and get the damn P2 over with… please!
Red
Weekend Update…
Apr 10th
OR
Will the week kill the last bear, as the bulls continue up on Bullish Monday and then trade sideways the rest of the week? Or, will the week slaughter the bulls by crashing down multiple days in a row? It’s any body’s guess at this point!
The market is a cruel mistress that likes to butter up the bulls by feeding them hype-hay, only for the sole purpose of getting the bulls fat enough… too later make steak dinner out of them. Neither bull nor bear is safe in such a treacherous environment. Both will eventually be slaughtered, as the master loves to eat them both.
Lately, the masters have been eating bear for dinner, but I think they are ready for a new kind of steak… “Bull Steak”, as too much of the same thing can get quite boring. We all need a change from time to time… and the masters are no different.
And fortunately (for the masters)… next week should bring in a lot of volatility as all the earnings are announced (meaning it’s “open season” for both bulls and bears). Of course all the companies will lie and spin their numbers to whatever they want them to be. But I suspect that most “insiders” have either already sold their shares, or will shortly. They know first hand… how bad their earnings really are.
With all this sideways to slightly up trading movement in the market, the company owners have had plenty of time to unload their bloated stocks to the unsuspecting public… at top dollar of course. But, now that earning season is upon us next week, what kind of numbers do you think they will report?
Of course they are going to lie a little (more like a “lot”), and maybe fudge a number or two (more likely “double” the real number), and the earnings will look OK, and the stock won’t tank… right? Maybe? Or maybe the numbers are too bad to be able to fudge enough where they are believably to the market.
Think of it like this… these last 3 months have been horrible for bad weather across the country as snow was everywhere. We already remember from previous job’s numbers that the government blamed the bad report on the weather, stating that people weren’t able to go to work because of the snow, etc… Now, if they didn’t go to work, to make money to pay bills, and have extra to spend… do you really think they went shopping and out spending money?
Of course not! People aren’t spending money… because they don’t have any extra too spend. What is that going to do for the earnings for next week? American’s are broke, and it isn’t getting better. Yes, they can continue to spin the numbers, and fool the public… but at some point (like now) the crap is going to hit the fan!
The “Bullishness” is as high as it was in 2007. Look at this chart from Cobra’s blog. It’s from Thursday, so it’s probably higher now, as the market rallied again Friday.
Cobra gets permission to post it from time to time, but it is from a subscription service at www.sentimentrader.com, so I want to give credit to where it’s from. It’s a few days old now, so hopefully no one minds that I posted it here.
The point to notice here is… “this isn’t the the time to go long”! Of course day-trading is different, but not swing trading or investing, as that’s like committing suicide right now. Yes, it could continue up some more, and you can continue to pass the gun around the table… spinning the chamber, and pulling the trigger while aimed at your head.
Each time you have a 1 in 6 chance (5 empty chambers, and 1 with a bullet in it) of shooting yourself, so the odds seem good… right? It’s like saying that everyday is a new day in the market, and there is a 50% chance the market will go up, and 50% chance it will go down. Same thing with flipping a coin… right?
We all know that’s not true, as the odds DO change when the outcome is the same multiple times in a row. While in theory, it is logical to state the odds as even… and that is logically correct, but humans are not logical in their actions. Maybe they are in their thinking, but their actions are done on impulse.
Take the coin for example. If you flipped the coin in the air 20 times in a row and every time it landed on heads, what are the odds that it would land on heads the next flip? Would you think it would be 50%? Seems logical doesn’t it? Here’s the problem with that thinking… the person who flipped it 20 times in a row is probably pretty amazed that it landed on heads every time.
In fact, I’d say that he changes the way he tosses the coin because he is actually trying to toss it the same each time. But he can’t, because his mind will remember all those previous times in a row that it landed on heads. He will change something, causing the coin to land on tails.
The same thing would happen if you were to spin the chamber of the gun 20 times. You would try too hard to continue spinning it exactly like you did the last time, and “Bang”… you kill yourself.
The stock market is no different. While next week should have a 50-50 chance of going up or down, the reality is that everyone who trades the market knows that it’s been up the last 6 weeks in a row, and that will prevent them from believing that the odds are the same for another up week.
They all know the past history of how many times the market has been up 6 weeks in a row, and what happened on the 7th week. Emotions are what makes these odds vary on the stock market, tossing a coin, or playing Russian Roulette.
And yes… I’m very aware that computers are now the largest traders in the market, with Goldman’s program leading the pack. But, who programed the computers? Humans did of course. And what parameters did they use to program them with? Human emotions is the correct answer. The super computers are designed to play (or I should say… steal money from) human retail traders, who are emotional in their trading decisions.
If the computers simply took greed, fundamentals, and emotions out the equation… the market would be at about DOW 3,000 now. But add in those factors, add you can quadruple the price. People aren’t logical in their actions, only in their thinking (and that’s only the really smart people).
Which again, brings me back to the market next week. Logic says the market has an even chance of going up as down next week. Emotions though… gives a different chance. Odds are much higher for a large down move next week, then even a small up move.
While many will disagree with my conclusions on “odds”, I’ll simply wish them the best of luck. If they decide to go against the odds, and place their chips on the Bull next week, (in my humble opinion)… the odds are highly stacked against them.
Red
P.S. Should the fall begin next week, and should you bears get really excited… like I know you will, let’s not forget our downside target captured here in this picture by our friend Sundancer…
Once we hit that target, we bears should be getting out of our shorts and put on our bull suit. Yes… I know, it’s hot, dirty, and smelly as bulls roll around in the mud, while we bears tend to clean ourselves in the river… but at least you won’t go hungry again. So suck it up (your pride I mean… mine too), and go long when all hell is breaking loose! By the way, that target should line up with the 107.38 spy print I got last month.
