Earlier, I posted a change in my thesis and I got an interesting post (all posts are appreciated) that proclaimed that I am a "contrarian" indicator. That's fair. It may even be fair to accuse me of being a novice. I can accept that. I never professed to be a professional trader. I consider every trade whether it be a loss or a gain, a learning opportunity.
Just a clarification in case some have misunderstood my position. I am net short on Countrywide and continue to be so. However, the current market condition is just too bullish with technicals showing an uptrend. I have to obey my set of rules. However, I know that eventually, the overwhelming bullishness in this market will hit a crescendo and all will revert back to the norm. Since I am a short term trader, I trade on momentum either to the long or short side. My long position in CFC is short term until options expiration and this position has netted me a nice gain today. I plan on holding this through Friday and take whatever gain I can get. I am long on April $37.50 call. So excuse me for being a novice.
I would like to wait and see how the earnings report is received by the market when Countrywide reports on April 26. Based on that I may continue to hold my long term puts and stay on hold or buy more. My research and insights on this blog shall not go in vain. But when the opportunity presents itself, I will also take it.
Google looks to be completing a double bottom base pattern and Yahoo's demise is Google's gain. I believe that Google can regain and break above the $510 resistance and make a run for mid $500's after earnings. So I will go long on that. LHCG is digesting its gains and it should do well when they report earnings.
The market is behaving in a way that is completely irrational. Perhaps it is due to the manipulation by PPT? I don't know. But when the market acts in dislocation to the underlying fundamentals, before long, it needs to revert in concert with the technicals. Either one must give and join the other. Eventually, the market will get overbought and then it will realize the "dream" has been dashed.
But at any rate, for those coming on to my blog either for amusement, information, or just to throw insults, that is fine. At least you are reading and that is validation enough. And, thank you "Mr. Anyonymous" for visiting my blog, I am glad that I can be of service.
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4 comments:
Hi Podboy, It's Mr Anonymous again. Have you considered the market's seasonality/usual earnings runnups in your decision to go long? Now that we are basically at the tail end of the April earnings run. For example if you look at a chart of last year (in April) what you will find is that (coincidentally just as you have proclaimed to go long the market,) the Nasdaq and general market PEAKED around this date last year. Just a thought.
Hi, Mr. Anonymous. Thank you for your comments. I generally look for trends and dislocations in the market place that gives me an edge. I know that I cannot be right 100% of the time and have made my share of my bad calls. As far as seasonality, there is definite credence to that thesis. But also, unlike last year, this market lacks definitive direction with divergences of fundamentals and technical aspects of the market place. In this case, I try to stay as nimble as possible and rely on short term moves in the market place.
Hi PB, Mr A again,
I also make more than my share of bad calls, nobody is always right. I do agree this year the market is trading very unusual. However my guess is to stick with the seasonal pattern "go away in May" unless a new pattern is formed otherwise. The rally has been very long in tooth. The market seems very "tired" at this level and when the buy on the dips mentality is exhausted (probably sooner rather than later) down she goes. I'd be very careful opening long positions here. "When the music stops will you find a chair?"
I watch the commercial for "Fast Money" on CNBC and they say the old adage buy low sell high is wrong. The "Fast Money" way is to "buy high and sell higher". So this newfangled way of trading is the current rage. So with this mentality out there right now (where nothing can go wrong) at some point someone is going to get left holding the bag.
The market has up until this point ignored all the negatives. Markets do not go up in a straight line. When this all comes to an end "it ain't going to be pretty"
Agreed thoroughly. I am nimble enough to take that into account. I am trying to expand my margins a bit. Additionally, the Google long call was for the earnings play which I expected to be good despite the contrary opinions on Google. Many traders are just too negative on it and since Google has pretty much languished for the whole year thus far, I felt it was time for a little rise in price to what I believe is a fair value, around $500 to $515.
Additionally, the market is in a major dislocation with the fundamentals and technicals. I know that Nasdaq has been in distribution for the past 2 sessions and advancers to decliners are bearish.
This irrational moves in the market place cannot go on forever, eventually, the fundamentals will catch up. Plus, I see that China is ready to blow off as well. I am still awaiting Countrywide earnings to short additionally.
The Cramer bs today on CNBC just about made me vomit. But I use HIM as my contrary indicator. ha ha.
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