Formerly NE North Dakota, now NW MN | No test! I have tremendous respect for your pencil.I doubt there's much I know that you don't, so I'm not sure on the technical side I can add much.
My interest in the S&P has been peaked as this obamacare thing has crashed and is now in the process of burning. Fundamentals are pretty friendly for equities and the economy in general. Favorable (although not entirely believable) unemployment numbers, a nice upside surprise on GDP (2.8% last quarter, street looking for 2), strong earnings and earnings growth, successful IPOs, favorable monetary policy (both in the U.S. And Japan, but now even in Europe) all make a pretty good argument for continued strength in equities.
I know that I have a hard time being bullish on equities, but I just see a whole bunch of headwinds that will trump all of that stuff soon. MHO, obamacare is going to decimate American retail. Combined with a short shopping season, this will be the toughest holiday season American retail has had in a long time. I'm starting to get the feeling, also, that yellen will actually accelerate bond purchases, but that with QE, the signaling effect is beginning to outpace the actual monetary effect, and that it will further lower business confidence.
I've also been thinking a lot about '29 lately, and how that crash was preceded by an crash of almost equal magnitude a decade prior. What they did differently was instead of gov't standing on the neck of business, they stepped back and let the economy fix its self. The upside was unemployment rapidly came down, the downside was the structural issues in the markets were never fixed, so it happened all again later.
nowadays, equity markets are largely back to or beyond pre-crisis levels. We are blessed with a gov't standing on businesses neck, but also HAVE NOT fixed the structural issues underlying our financial system. Basically, its my belief that another crash will come. The next crash will be larger than '08-09 because we have no safety net, global GDP growth is poor (at least amongst our trading partners), there's no cushion underneath. If we fall, we fall, and the landing hurts.
So, as you might imagine a person with that world view would, I'm very interested in the technicals to see any signal of a change in sentiment. I went short Thursday 20 shares of SPY at 177.16ish. I also bought a 180 call option that expires in 13 days or so, just in case everything really goes pear-shaped on me. The RSI was not totally overbought, but certainly not neutral, and the stochastics indicated a slowdown in buying. Who knows what will happen. Glad to hear your not uber bullish! |
SnP for Khall
