Sorry 🙂 I was short via FAZ when Tim Geithner released the “stress test” results for US banks last year. I got my ass handed to me. So, the lesson learned is that you want to be long “stupid” (ideally, a European financial sector fund, i.e. fundamentally unsound, i.e. “stupid”) when bank stress-test results are released.
CAC and FTSE ramped up in anticipation of the banks being given a clean bill of health. (extend and pretend). However — one thing that happened as a result of our stress test is that some big banks sold assets to raise capital. Some allocated more capital against future loan losses. Some recapitalized by selling more shares. So, as part of the process of “passing” the stress test, the banks agreed to do fundamentally sound things that they should have been doing all along.
The assumption is that the European banks are undergoing the same process. When the banks “pass”, their stocks are going to go up up up in Europe. What they'll do (just like our banks did last summer) is offer more shares at these new higher prices. The stocks will (counter-intuitively) go even higher because this is good news (i.e. they're acting responsibly) even though mathematically it is a share dilution. There will be a shortable pop, but I'm not gonna go there.
Short term: stupid bullish. We have broken above the trend line, and I'm pretty sure we're gonna close above it. Short-covering-palooza will follow.
Ok… now my head is spinning. Are you bullish for the rest of the day and tomorrow (short term), or are you bearish. Same question for the next few weeks.
I gave Tony the nickname “Mr. Bear Porn” because his charts and bias were so bearish for so long.
The reason we're going to break through the trendline this time has to do with Europe's “stress testing” of their banks. What happened when we did that to ours? Markets went up. Why? Gov't was putting their “stamp” on the capital ratios, etc. Don't trade reality (except when you should). Trade sentiment (except when you shouldn't).
sell the rallies buy the dips DOH!
You mean they have reset to bullish mode now. LOL
daily hourly has to reset that's all I will say 🙂
It sure looks like it Jim. The next print up is 112.41 spy… after that, who knows?
This is going to the moon folks.
Cannot even move long without chasing. so will be out of market in a bit.
The vix is less than65 so this is not supported by big buy volume. anyone have a better handle on this am volume?
Sorry 🙂 I was short via FAZ when Tim Geithner released the “stress test” results for US banks last year. I got my ass handed to me. So, the lesson learned is that you want to be long “stupid” (ideally, a European financial sector fund, i.e. fundamentally unsound, i.e. “stupid”) when bank stress-test results are released.
CAC and FTSE ramped up in anticipation of the banks being given a clean bill of health. (extend and pretend). However — one thing that happened as a result of our stress test is that some big banks sold assets to raise capital. Some allocated more capital against future loan losses. Some recapitalized by selling more shares. So, as part of the process of “passing” the stress test, the banks agreed to do fundamentally sound things that they should have been doing all along.
The assumption is that the European banks are undergoing the same process. When the banks “pass”, their stocks are going to go up up up in Europe. What they'll do (just like our banks did last summer) is offer more shares at these new higher prices. The stocks will (counter-intuitively) go even higher because this is good news (i.e. they're acting responsibly) even though mathematically it is a share dilution. There will be a shortable pop, but I'm not gonna go there.
Short term: stupid bullish. We have broken above the trend line, and I'm pretty sure we're gonna close above it. Short-covering-palooza will follow.
If this crosses over the trend has changed:
http://stockcharts.com/def/servlet/Favorites.CS…
I got long DRN yesterday. That's our own version of “stupid” (3x commercial real estate). We're trading in Bizarro world.
Ok… now my head is spinning. Are you bullish for the rest of the day and tomorrow (short term), or are you bearish. Same question for the next few weeks.
I gave Tony the nickname “Mr. Bear Porn” because his charts and bias were so bearish for so long.
The reason we're going to break through the trendline this time has to do with Europe's “stress testing” of their banks. What happened when we did that to ours? Markets went up. Why? Gov't was putting their “stamp” on the capital ratios, etc. Don't trade reality (except when you should). Trade sentiment (except when you shouldn't).
🙂 watching for 1088 spx to see if this holds