The Sound of a Market Slamming A-Holes Across America

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Well, that was a fun little sleigh ride.

A HUGE, INSANE BOATLOAD of money left the market today.  If you sort the SP-500 components by market cap, nearly all of them lost a few percent, AND MORE.

That’s literally $100-200 billion in value–it would be an understatement to say that today was pretty, pretty, bad.

So where does that leave us?  Me?

I’ll tell you.

In recent days, my breadth indicators has been giving a mixed picture:

Still Negative, But Tomorrow Should Close Higher – As of here, bearish

Surprising Development For Bears – As of here, tepidly bullish

Still Hanging in There – As of here, tepidly bullish, but not putting any money to work.

I’m proud of my work.

That last post, if I may cite as evidence, is why my Breadth Indicator is one of the most objective ways to analyze the market. I’m simply reporting to you guys what it says with regaurd to bull/bear, trend/no trend.

I can’t stress to you how invaluable this is.  One, it works, and two, it’s objective.  Not a support resistance that can fail intraday, stopping you out, but then holds at the EOD (1040).  Not a head and shoulders pattern (widely cited by everyone) that may or may not “work.”  Not a whatever it is that is ultimately subjective.

It was bullish on one hand, bearish on another, so I sat out.  It’s that easy. No “do I buy here, short that, hedge this, sell puts on that.”  I mean, you can do that if it works for you and is your prerogative, but for me, I need simple.

This accuracy and objectivity is essential if you want to avoid getting chopped to shit.  I know when to trade breakouts, and I know when to sit them out.  Of course not every trade is a winner.  It’s akin, however, to checking the surf before you hit the beach.  It just makes sense.  Surf has been shitty for a while, so I stay home.  All told, my portfolio has grown by meager basis points since I called for a correction in April.  Compare this to many others who have chopped away a portion of the (in hindsight) very easy gains made from late Feb – April.

Most assuredly, breadth will be completely negative as of today, so it should go without saying that there will be no new momentum longs until we get the green in my indicator.

10 thoughts on “The Sound of a Market Slamming A-Holes Across America”

  1. Indeud. On Sunday evening I overheard a father discussing stock investing with his young adult son. The first thought that came to mind was how difficult this game is. I only heard how great it is to invest for the long term. I wonder what he’s telling him tonight.

    • I am beginning to wonder if the day will ever come again when you can invest for the long term….assuming that LONG TERM is more than a couple fo days

      • next cyclical credit boom?

        I dunno, assuming were not eating our neighbors children for gold dust and bags of rice, maybe 5-10 years?

        Dont forget my demo is hungry, hungry for fucking the next generation. We will do it, trust me. So, I figure well (I’ll) be in prime asset gathering years in 5-10 years from now.

        One thing I wonder about is the demographic overhang of there being more baby boomers trying to sell more assets (stocks bonds house etc) to a smaller group of buyers (my generation). More supply, less demand = price pressure.

    • yeah.

      trading is very difficult bec you battle your own demons. It’s easy to say BP is a buy/short here. Its hard to put money on it, and let it bear out. It’s hard to know what stop is intelligently placed, and which one is a sucker’s bet (http://ppt.ibankcoin.com/?p=1880). It’s hard to know…everything.

      Here’s another point re long for the longhaul:

      EVERY company fails or sucks for a long time, even the ones that don’t.

      AAPL was a garbage stock from 1984 – 2004. That’s just a modest 20 years of OMG WHAT A POS. Then, in the last 6 years, you made all you need to.

      Or AMGN.

      1984-1986 good.
      1986 – 1990 bad.
      1990 – 1991 good.
      1991 – 1995 bad.
      1995 – 2000 good.
      2000 – 2010 bad.

      So, we have a stock that went from 8 cents to 50, a return of OMG IM RICH%, yet, i’d wager that <.5% of owners held THE WHOLE way, and weren't discouraged that only 8/24 years were good, or in other words, 2/3 of the last generation SUCKED for holding AGN.

      So yeah. Take from that rant what you will.

  2. I remember you posted that the indicator would be available inside the PPT – is it up yet? I haven’t been able to find it

    • I have it built on my end (iBC dedicated server located in a solid steel vault at one of the many bilderberg palaces, seriously, no shit), but still waiting on J-dawg to build it/incorporate it into PPT. He’s a busy guy, so I understand, but still going off his estimate, I’d say 1-2 weeks, tops. Like, for real tops. (fingers crossed).

      trust me, you’ll know where it is, bc its gonna be “launched” not just innocuously placed.

  3. SC- been hanging around the PPT for a few months, 2-3 hrs a day. Started looking at your stuff a week or so ago = intrigued. I’ll have Q’s.

    Thx for the work.

    • Thanks for reading muktuk, and I’m glad you find my work interesting. Yeah, any questions you have don;t hesitate, I’m happy to answer them.

  4. Danny,

    I think I saw your potential before many of the other did. I think finally folks are starting to see what you can do.

    Keep it up. It always a very worthwhile read not matter what an individual’s strategy is.

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