The market continued its ascent to new all-time highs. As someone who has been long-term bullish for a while, I feel like an old man of this bull run. Lots of folks are seeing the light after ignoring the positive (and non-negative) signs for so long. Short squeezes have replaced defensive stalwarts as the fashionable way to play a rally that feels like it can do no wrong (a bit frothy). Incredible how far we’ve come — yet, there is probably more road ahead of us. We have yet to enter the stage where psychology is overcommitted to positive information flow. I’m waiting for consumer sentiment readings of over 90. Even then, as long as there is momentum in the market, gains can be made.
Big stories this week were USD strength over the Yen (Nikkei to 15,000) and the resumption of what looks like a nasty prolonged bear market in gold. Not a ton of economic data this week, but next week look for the BoJ meeting, FOMC minutes, and Bernanke speaking before the Joint Economic Committee of Congress.
Sectors which saw strength this week were financials, energy, industrials, and technology. It’s amazing that oil has held up so well in the face of a strong dollar and the deterioration of other commodities. Look for some volatility in the energy space. Laggards this week were utilities, consumer discretionary, and basic materials.
Market conditions like this make everyone who sticks to discipline look like Chicken Little. While there might be plenty to worry about, the sky is not falling. The MAMOx oscillator and the longer-term MAMO both turned bullish early this week and confirmed with the close on Friday. It is NOT a good strategy to buy these flips after the market has run so far (decent signal for a quick short), but it does signal incredible underlying strength in the market and bodes well for longer-term follow thru.
Marketview: Former Resistance Levels
Posted by DynamicHedge on May 11th, 2013 at 1:28 pm, Comments: 0
New week, new all-time highs. The big news was the Dow closing over 15,000 for the first time in history. The Yen finally crossed the [...]
Posted by DynamicHedge on May 10th, 2013 at 2:35 pm, Comments: 0
No one is really enjoying this rally — most are simply in awe. There seems to be a few layers of worry/neuroses/paranoia circulating among investors [...]
Why I Hate Breakouts
Posted by DynamicHedge on May 8th, 2013 at 2:12 pm, Comments: 0
For the last couple years: And now: No one knows how far this breakout can carry us, but it feels like a trap. Share on [...]
Do Struggle Markets Deserve Respect?
Posted by DynamicHedge on April 30th, 2013 at 8:39 pm, Comments: 0
In a post-crisis market, some countries trade at a premium because they possess the ability and the stomach for high stakes QE. Emerging markets and [...]
Marketview: Rough Patch
Posted by DynamicHedge on April 20th, 2013 at 3:09 pm, Comments: 0
The Boston Marathon bombings opened the week on a tragic note. The subsequent manhunt for those responsible captivated the world. Monday was the worst single [...]
Marketview: Untethered Price Action
Posted by DynamicHedge on April 13th, 2013 at 5:10 pm, Comments: 0
Fed Monetary Stimulus Exit: A Blueprint
Posted by DynamicHedge on April 7th, 2013 at 11:47 am, Comments: 0
The Fed will hold roughly $1.5 trillion in MBS or 30% of the total market by the time their planned buying is over. After pumping the [...]
Marketview: Unfinished Business
Posted by DynamicHedge on April 6th, 2013 at 3:39 pm, Comments: 0
A week dominated by central bank plans, smart-sounding people trying to pronounce “Pyongyang”, and a nasty Nonfarm Payroll report. The Bank of Japan answered any [...]
MAMOx Rolling Over
Posted by DynamicHedge on April 5th, 2013 at 10:23 am, Comments: 0
The indicator has not turned bearish yet, and will not likely do so until next week. It appears that this very reliable trend indicator has [...]
DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
- Marketview: Always Something to Worry About
- Marketview: Former Resistance Levels
- Concern Onion
- Why I Hate Breakouts
- Do Struggle Markets Deserve Respect?
- Marketview: Rough Patch
- Marketview: Untethered Price Action
- Fed Monetary Stimulus Exit: A Blueprint
- Marketview: Unfinished Business
- MAMOx Rolling Over