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Crash of 2020

March 9, 2020 / / No Comments

What a historic times! After relentless selling and the fastest correction on record according to Deutsche Bank, we’re seeing some crazy after-weekend moves in the over-night session. S&P 500 index futures are limit down (meaning, after a quick -5% move trading has been halted until the US opens), bond prices are surging and that oil… man, crude oil was down -30% from Friday’s close in just a matter of minutes!

Brent oil’s move at the moment stands as the 2nd largest one day move ever. On Jan 17th, 1991 Brent closed down -34.8% in a day. Let’s see where it closes at today, but the next largest move is -13.5%, so today’s move will be either the largest or second largest on record. Here’s a chart of WTI oil.

I don’t know how the stock market will react once the US session starts. Will we see a bounce, or a continuation of selling is anyone’s guess at this point. However, I hope you took precautionary measures in February when I posted Bumpy road ahead and Bonds, buy Bonds. Hope you’re safe and were able to limit you losses.

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Bumpy road ahead

February 2, 2020 / / No Comments

Markets fluctuate, they go up and they go down too. Our job is to make the most out of these fluctuations by going with, and not fighting, the tape.

Even though you could have pointed out many reasons why one should have been expecting a correction, or even a crash, we’ve been bullish for the most part of last year up until now. Looking back, that was the only right decision to be made.

However, we think now could be the time for becoming cautious going forward. We’re not becoming ‘the end of the world’ bearish yet, but the ride could become bumpier.

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Risk on

July 3, 2019 / / No Comments

When reading financial headlines one could easily think the markets are selling off, we’re in a in severe downtrend where panic is just about to hit the main street. It’s really hard to find anything positive, and even if we get to read something that could sound a bit optimistic it’s accompanied by a word of caution, caution ahead of the next recession. Everyone’s obsessed about it.

I don’t know about you guys, but I like to stay open minded and being optimistic is a viable option too. It helps spending some time with family and friends during the Summer, and having the Adriatic sea at our fingertips is just a bonus.

Since the beginning of the year we’ve been bullish the stocks (Is it over?), bitcoin (Are cryptos trying to bottom?) as well as gold (Will gold bugs finally have their day?). It’s a ‘risk on’ environment, you know. However, is that about to change?

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Sectors on the watch to short

October 19, 2018 / / No Comments

I’ve been bullish stocks for the past 2 odd years. But it looks to me a bigger correction in the US stocks could be upon us. Emerging markets have been under performing this whole year and there are no signs of a reversal yet (see Watch Alibaba for clues in emerging markets). Then the German DAX is just confirming the move down is very likely (see Winter coming?). And it looks gold could be starting to catch some bid (see Rotation to gold and miners?).

We saw a few failed breakouts higher in the US indices recently. I was writing about the Dow Jones Industrial Average, looking for a continuation higher. But it failed and that failed break higher, by the way a similar one happened in S&P 500, is causing concerns for bulls and all these developments are by no means constructive for stock bulls. 

So its up to everyone to decide what you want to do. You can either stubbornly hold to your longs, you can be defensive and go into cash or you can even short some indices, sectors and even individual stocks. But which ones and under what conditions?

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Dow Jones Industrial Average: stocks are going up!

October 3, 2018 / / No Comments

So many guys are trying to call the market top in an up trending market. Sure, any swing top could be the top, but calling the one is a low probability bet for obvious reasons. Usually major tops are a process and they need time to develop. For example one could argue that German DAX is currently forming a major market top. We’ll see if that will be the case. But there is no sign of a major market top in the US stock indices yet.

And DJIA closing at a new all time highs, surpassing this January’s high, is anything but bearish. Breadth indicators are also not telling a bearish story. And what if there is a bigger risk of a melt up, rather than an imminent crash?

I wouldn’t exclude this case and neither should you. Sure, stock market is in the later stages of a bull market in my opinion, but does this mean it should crash? If it does, I won’t be stubbornly holding to my holdings. And before we see any serious deterioration it’s hard to join the doom and gloom side. When that happens I will be more than happy to short it.

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Small and Micro Caps at all time highs

May 17, 2018 / / No Comments

…is not bearish to me! Why it would be? For so long we’ve been listening that only the FAANG stocks are pushing stock prices up. They’ve been performing very well, indeed. But they aren’t the only ones!  Read More

Is DAX30 getting ready to rip higher?

September 7, 2017 / / 4 Comments

I’ve expressed my bullish bias in the stock market with my past few posts. Please read in my last post my observations that’s so interesting to see the eagerness to be bearish and pessimistic and with calling the market top. So I think there is no need to bore you with this again and let’s go straight into the charts.

My main question today is, can DAX30 rip higher into everyone’s face in the next couple of months? Take a look at the weekly chart of DAX. Read More

Why are you so pessimistic?

September 3, 2017 / / 6 Comments

There is so much pessimism in the market right now and it’s so hard to escape from it. It feels that if one is not bearish, then he must be missing something or he is just a blind bull. I know, there are problems in the world. But was there a time when everything was rosy?

Anyway, today I would like to write a post around a tweet of mine that brought quite a lot of attention. I wrote about the same topic on June the 3rd [1] and now I would like to add few thoughts to challenge you by asking what if we are in the first stage of a multi decade long bull market, similar to the ones that started in early 50s or 80s? Read More

Few trade ideas

June 18, 2017 / / No Comments

Let me highlight few trade ideas I tweeted recently. So let me share them with you with reposting them here…  Read More

S&P 500 needs help from broader market participation

May 28, 2017 / / No Comments

This week SPX closed at all time highs and it broke above it’s 3 months trading range. New all time highs is a characteristic we see in bull trends. Now the question is, can we see this move to be extended or rejected. In this post I would like to show you constructive signs based on DJTA, equally weighted SPX and XLF ETF. Read More

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