So far this pullback is normal - about to the principal Fibonacci level (38%) of 1,411 cash S&P 500. On Daily Graphs the top of the "W" looks like 1,410; that's also the open price of the IBD "follow-thru" day, so it must hold for this "rally" to stick. No war overnight, so Asia markets rebounded. Jesse Livermore's writings illustrate the importance of accepting & recognizing a "normal" pullback.
There's a lot to worry about - see recent post titled "Iran, etc. Worries" for some political and economic ones that trouble me. But without a recession, the valuation of US big caps is cheap, imho. [I will write about those values soon.] The real pain in housing seems to be concentrated in the old rust belt (per foreclosures, etc.). The surrounding farm belt is probably going to have a record year, however, due to corn prices. In 1983-5 the rust belt was crushed due to Volcker's insanely strong dollar, but there was no recession. Stocks consolidated in 1984, then took off in 1985 for a huge run up. That's what I think will happen some time soon. We have too many apocalyptic bears around. They'll buy our stocks at higher prices when they capitulate or get liquidated or get funds pulled out. Barring unforeseen events, of course.
I have to put some commentary in the comments or I will have too many posts. Or I can put later thinking in "PS" additions. I'll mix them up.
ReplyDeleteI see we have two Fed big mouths today - Stern & Lacker. That will likely cause some volatility. A final Q4 GDP number, too. That could be a mover, too, if its a big change.
The crop report tomorrow is a big one. I own cotton & oats. I figure those are easy to have switched to corn bigtime. [one problem are crop subsidies in cotton, so that's a risk]. Swithing from soybeans seems easy, but it screws up crop rotation and risks lower yields & infestations. If I was a farmer, I'd stay put in my C/S ratio, figuring if lots of others switched bigtime, them the S price rise would offset - diversification. But I figure many did switch a lot so own no corn. And the big S carryout and South America crop will limit S price, imho.
ReplyDeleteThere's a big Quarterly Pig Crop report after the close tomorrow, too.I own December Lean Hogs, too, so am looking for a big drop in pigs. I wrote about that a few posts ago re my thinking. I got agood entry, so am, uh, hopeful. Uh oh, "hope" is a bad word.
nice to see frosty and si in here. i think the main difference between now and the 80's is u had a 10 yr consolidation and much higher bond yields.
ReplyDeleteits pretty clear to me that as long as corporates spew 50 bil a month to support buybacks and takeover the tape will luckily continue to piss me off.
but if and when that virtaul cycle stops, and the secular headwinds facing the united states economy becomes front page news, the market is toast. in my lifetime, maybe not, but its gonna happen.
americans rnt as gud as adapting to new stuff, as past generations, and in fact, the me generation has a sense of entitlement beyond reason. meanwhile kids in china and india r doing algebra by the 3rd grade.
after listening to forbes yesterday i guess im rooting for ruby. seems extremely disciplined fiscally (most important), tuff on terro (2nd most important) and finally pro choice which means he doesnt give a crap about the bible (3rd most important).
go Ruby!
LOL crop report. Where is Beeks when you need him?
ReplyDeleteBunkerman can you some day do a post on the best way for a simple person like me can start trading commodities ( e.g. corn, orange juice, sugar..etc..) Can you reccomend a broker? I know I'm only a 'fake' or 'virtual' trader but I would like to follow you and make some 'real' profits.
ReplyDeletesouthpark new season continued last nite. very politically oriented, and a spoof on the show 24 (which im not familiar with, so im sure i missed some of the humor).
ReplyDeletethe plot. russians, hired by the queen of england, hid a nuclear bomb inside hilliary clinton.
my father in law was over and asked me, u seriously watch this. i responded the humor (besides blantant potty humor) is actually quite intelligent. so he started watching. he cundt have watched a worse five minutes. just one potty joke after another.
southpark has hit 3 for 4 on new episodes. they r on fire, even after 10 yrs
my my the bls comes through again. maybe a 4th revisions and we cud get 3% with no inflation.
ReplyDeletepass the kool aid
OK, I just wrote a note to Tivo South Park. I forgot to do that before.
ReplyDeleteOK, Bud, I had planned to do a post on that sometime.
ReplyDeleteI think the stats are that most blog readers don't post. I do appreciate comments, though, otherwise I think I'm writing to myself. Lolol, which I mostly am. This blog is fun, not a job. Actually, the writing helps me think through my ideas better & not be impulsive (aka stupid).
ReplyDeleteUh, Mern, who's Ruby?
ReplyDeleteRudy G. city of new york old mayor.
ReplyDeletesteve forbes is on board, who i like fiscally speaking, but hes like a rug on valuim.
the crop report ROFL
ReplyDeletewhere the hell is beeks?
"margin call boys"
"u know very well we dont have 425 million dollars in cash!"
"seize all assests of duke and duke"
So who/what is Beeks?
ReplyDeleteSheesh I must be from Mars. I don't know any of this modern stuff.
i link your optimism bunkerman, i hope you are right, but would like to see better action in brokers, also i would be on the road, that is one of the reason i am in cash
ReplyDeletenice to see you, mern and frosty
1410 on sp would be a key level to watch
ReplyDeleteI agree re 1410 S&P cash, Si.
ReplyDeleteEspecially when traveling (& if distracted), "protect yourself at all times" - cash is best for Short Term capital.
if u never seen the movie "trading places" eddie murphy and dan akroyd (1982), NFLX yesterday. its almost as gud as wallstreet, but its a comedy.
ReplyDeletedon ameche is hilarious
OK, I'll put it on the movie list.
ReplyDeletei still am blown away by the bls on the GDP report. always reminds of the guy who said exactly this on cnbc (in bush admin). "whats important is to get the data out as fast as possible. if its wrong, the revivsions will pick it up. just getting a # out asap is the most imporant thing. " is that not the dumbest thing u have ever heard????
ReplyDeletei came in short, held my nose, shorted more, just covered most of em.
today shud be mark up day, if u believe that tripe really occurs.
gonna try to hold this VE long term (water play) and maybe avg down. but its been so long since i did that, i dont know if i can remember how.
Come on Bunkerman!!! You never seen Trading Places? I think it should be required viewing for all traders ( alongwith Wall Street).
ReplyDeleteLol Bud. I didn't even watch "Wall Street" for about 15 years since I had lived through so much of that stuff.
ReplyDeleteif my thesis that LEH being the market signal provider is correct, today's action in LEH is not encouraging, essentially put in an inside day after lower low yesterday(pickup in volume) underneath the 200d, ofcourse the day is still young, would be interesting to see how this thesis develops in the coming days
ReplyDeleteLEH sure dont look gud
ReplyDeletei hope it dies
funny i didnt read your post frist Si
ReplyDeletehad to cover some LEH, was pretty heavy there.
ReplyDeleteiran must be loving what is happening to stocks and oil
Back from the granite countertop people. Argghhh, homeowner torture session continues. This is the worst - gotta post on it later.
ReplyDeleteWow, that LEH chart is pukacious. It's getting close to suppor ton the weekly, though.
I re-entered my bid on those extra S&P 500 index calls. Maybe I'll get them this move (& regret it?).
More prayers, please. ;-)
Bunkerman, you are one brave dude with those sp calls, but as they as no guts, no glory. Not for me though, i am too chicken
ReplyDeleteIf I was brave, I'd be in the futures. But that war risk scares me some. I don't think I'll get the extra ones. The market makers keep a big spread & I'm at the bid side.
ReplyDeleteBtw, I play in the calls in the money a few strikes - there aren't as many sellers there to hit my bid.
ReplyDeletenice rally since about 230, and quite shocking
ReplyDeletelol
i bet the mark ups stop near 345 or so
taking some EEM sh home
die market die!
Hehe, "real" buyers do it on the dips. ;-)
ReplyDeleteReally Bunkerman? I did some buyin too around 230. I guess I accidentally got the buying mewmo sent out to 'real' buyers.
ReplyDeletelol Bud. I "hope" it works out. I didn't get my calls, was a bit tough on my bid, missed them. :-(
ReplyDeleteone stock that stands out in today's scan is PBR, the weekly is a pretty one (serious of higher lows), let us see how this one plays out
ReplyDeleteThe extra calls I miised on, that is - I still have those I got yesterday. [clarification]
ReplyDeletedie LEH die
ReplyDeleteMern ....are you only trading LEH today?
ReplyDeleteAAPL rofl
ReplyDeleteim short 20k DNDN is that bad?
ReplyDeletelol
kidding
im playing the CEGE though
the hedgies r gonna get smoked in DNDN
excuse my language but what a friggin day.
ReplyDeleteCEGE made it all worth it
rofl
omg thats was awesome keep 1k overnite
ReplyDeleteLMAO
thx bt, got it right for once
cudnt help myself, im gone.
ReplyDeleteguess 5k wasnt a big enuff swing
geesh
well now back to the program
die market die!