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Just A Mirage


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Looks like 12 in a row was all she wrote for the Naz. At least for now. Question now is how long the dip lasts. Structurally, even with a dip in the next few days, uptrend still looks good. Tricky one for trading here.

 

Cumulative A/D has broken the long term downtrend and is now at levels where the S&P was at 1300.

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Is this the top, old Richard Russell has turned bullish. :wacko:

 

It's clear to me that we are in a rally within a secular bear market (some will call it a cyclical bull market). In other words, it's coming within the confines of a long-term or secular bear market. Old timers saw this same situation during the 1966 to 1974 bear market. At that time we saw a series of cyclical bull markets, all coming within the framework of a long-term or secular bear market.

 

In the end, that secular bear market ended the way most bear markets end -- amid black pessimism and with blue-chip stocks at great values or "below known values."

 

What was missing at the March 9 lows? Extreme pessimism was absent as were the great values in blue-chip, dividend-paying stocks sporting yields of 6% to 10%.

RR

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"Put option volume swelled to about 1.53 million contracts in the SPDR S&P 500 (SPY.P) on Thursday after an institutional player extended a large bearish position in the exchange-traded fund that tracks the performance of the S&P 500 index."

 

"Rather than an outright bearish bet, this appears to be a hedge on a long stock position in the Spiders, Schwartz said."

 

http://www.reuters.com/article/marketsNews...20090723?rpc=44

 

Who knows?

 

This was done before the rally:

"With the fund's shares trading at $95.92, the institutional client reversed those August put positions in favor of the December contract where he bought 120,000 $95 puts and sold twice as many $82 puts, Schwartz said."

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Still have a light short position. Not daytrading or scalping options so am just sitting on hands.

 

Would flip heavy long on a sustained break above and retest of 1K, or some sort of life-altering out-of-body experience, but that's about it.

 

 

I recall back in the spring we all had a good laugh at somebody on Crapvision who said it will be safe for the public to get back into stocks above 1060. Even TJ had a good chuckle about that.

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One thing about Hairy. He sticks his neck out.

 

I heard his rationale on Bloomberg a month or so ago and it made sense to me. It was something I had thought about before. He crystallized it. But what he doesn't account for is the Fed's ability to pump the market up via its primary dealer operations. Most people tend to underestimate this.

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If more pension funds are taken over by the government, I get the idea that the government/fed will have a lot more control over the pumping up of stock prices just to maintain them.

 

"Delphi's hourly pension plan covers 47,000 participants and has about $3.7 billion in assets and more than $8 billion in liabilities, according to agency estimates. The Pension Benefit Guaranty Corp. expects to be responsible for about $4 billion of the plan's shortfall of nearly $4.4 billion."

http://www.mlive.com/business/mid-michigan...ry_as_feds.html

 

I may just be blowing smoke, but it wasn't long ago that it was a concern for the government to not have a lot of pensions go belly up. Probably a good reason to have a steel I-beam under the market at 880.

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