Too convenient to buy stocks
The stock market did its best yesterday at frustrating the bulls and bears. We find ourselves today in a similiar situation. Neither side seems able to take the lead .
The bulls deserve praise for not allowing the new low list to expand when the market breached recent support. They should also feel proud that the transports are showing good relative strengh despite the relentless rise in energy prices. Furthermore, the high volume decline yesterday signaled the begining of true selling which is necessary for the ultimate cleansing. Heavy selling late in a decline means "watch out below", but be ready to buy in stages. Also, bearish sentiment has risen lately in the AAI and II polls, a relatively good contra indicator.
The bears on the other hand also have reasons to be giddy. The market seems to be taking on classic bear market action by peaking in the morning and swooning in the afternoon. This type of pattern must cease in order to demonstrate that the bulls are willing to hold positions for longer than a few hours. Perhaps the bears are being most devious today by allowing the bulls all day long to buy at or near support levels. The bears seem to be biding their time before they start aggressively shorting . The prices here seem just too comfy for the taking. Usually, it is best to have the feeling of overpaying when you buy in order to have confirmation that the up- trend is in tact.
All in all , we have assesed the situation and have decided to lighten up into today's strength. We have sold our positions in various ETFs such as QQQQ and IWM. We have also sold DELL and CISCO. We intend on Shorting QQQQ for a hedge if the Nasdaq reaches around 2140. We are looking to bring our exposure down to aprox: 35-40 %. Another oversold bounce may materialize but is most likely not worth playing. The short to intermediate trend is down and not worth fighting. Stay positioned for much better buying opportunities , you will be glad you did. ___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________
The bulls deserve praise for not allowing the new low list to expand when the market breached recent support. They should also feel proud that the transports are showing good relative strengh despite the relentless rise in energy prices. Furthermore, the high volume decline yesterday signaled the begining of true selling which is necessary for the ultimate cleansing. Heavy selling late in a decline means "watch out below", but be ready to buy in stages. Also, bearish sentiment has risen lately in the AAI and II polls, a relatively good contra indicator.
The bears on the other hand also have reasons to be giddy. The market seems to be taking on classic bear market action by peaking in the morning and swooning in the afternoon. This type of pattern must cease in order to demonstrate that the bulls are willing to hold positions for longer than a few hours. Perhaps the bears are being most devious today by allowing the bulls all day long to buy at or near support levels. The bears seem to be biding their time before they start aggressively shorting . The prices here seem just too comfy for the taking. Usually, it is best to have the feeling of overpaying when you buy in order to have confirmation that the up- trend is in tact.
All in all , we have assesed the situation and have decided to lighten up into today's strength. We have sold our positions in various ETFs such as QQQQ and IWM. We have also sold DELL and CISCO. We intend on Shorting QQQQ for a hedge if the Nasdaq reaches around 2140. We are looking to bring our exposure down to aprox: 35-40 %. Another oversold bounce may materialize but is most likely not worth playing. The short to intermediate trend is down and not worth fighting. Stay positioned for much better buying opportunities , you will be glad you did. ___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (âKTBâ) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (âKCAPâ) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firmâs principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
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posted by Kleiner Capital Management, LLC. | 12:56 PM
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