Where Is The Don’t Buy The Bottom Talk?

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August 30, 2010

Still short. Friday sucked, today was nice. We should move to new lows. However, this is likely to setup a nice reversal once again. Trend is your friend though.

I’m starting to see weekly oversold kicking in today which typically means its going to stick on Friday. Which further means that we will go lower intraweek if not all week long. The weekly signal setup coming on is not even a full trend reversal type thing. However, I don’t want to get ahead of myself and will reserve judgement until the market puts some more data under its belt.

Imo, 1040 on SPX is not even important anymore. Its 1020. When the market cock teases like this, they are saying 1040 is a) going to get tested certainly, and b) the people that bought it last time are set to buy it again there. However, the market is setting up the b) group.

Once again, and I don’t mention this, but I have lots of my own stock screens that I check daily. Many more stocks flipped to down today than up. The whole emerging market complex flipped and it was teasing last week.

What I did? Kept my index shorts. Bought FAZ. Will load more shorts tomorrow if we break today’s low.

I wonder why I’m not hearing any advice or tweets to “not catch falling knifes” or “don’t be a bottom picker.” Does that mean everyone who I think is smart is buying the bottom? I’m seeing the beginnings of a trend and technicals getting destroyed just in time before the big money comes back from St Barths.

Some examples of why being short the market makes sense here.


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  • Bill

    Market has a bit of a slope of hope feel to it. All recent rallies have been on hope of gov’t interventions and then they sell the news when it gets announced. Started with Euro Tarp 5/10, then Yuan revaluation 6/21, then QE II on 8/10, and most recently Japan’s Stimulus #9,999 on Globex 8/29. Each one the market rallied in anticipation then sold into the news. And each short covering panic spike was weaker and weaker. The Euro Tarp was good for 2 days of rally, but the Japan Stimulus Globex squeeze didn’t even last until morning… At some point when folks finally give up on the gov’t will save us theme then we could have a nice downside puke fest IMHO…

  • http://www.stockrake.com StockRake

    The world is seeing values setup in things like BAC, and INTC, and MSFT, but things will get “MORE valuable.”

    Then we’ll see a much broader value rally. All my guess, but that trend of value starting to perk up is just beginning. Everyone is talking about how cheap some things are. One thing is for sure the timing of fundamentalists is horrible on the short term. They will be right, but its going to take time. That curve is long.

  • http://www.stockrake.com StockRake

    Furthermore, I don’t even see that many people even thinking things look that bad whatsoever. Most people are playing counter trend.

    Anyone who is bearish now is being classified as a bearshitter, but really, price action has spoken over the last month. I’d love to be long, but I don’t bother with it when the trend is the way it is.

  • Bill

    yeah hate to be in the same camp as the bearshitters but have to respect the tape action.

    just take a look at SMH and KRE and tell me this market is healthy…