Stocks continue to rise, SPX up 8% since recent 869 low

6 posts / 0 new
Last post
Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Stocks continue to rise, SPX up 8% since recent 869 low

Technical analysis was showing head and shoulders formation that got blown out of the water this past week. If stocks continue and break out of 950 resistance 1000 on the SPX can be a real possibility. Even though i have no clue who is buying stocks. Arent people broke, saving, 7% paying down debt, losing jobs, homes, cars, and other things?? I just dont understand where the money is coming from. Maybe those who still have jobs are still contributing to their 401ks? Also, fund managers who have big cash positions are starting to play again. Its a decent explanation as to why stocks bounced so quickly in the last week. Managers saw the dip as a buying opportunity. I have short bias on the weak names but not on any other names. Still staying out of this crazy market.

Historical comparison:

Bear market of 1929 to 1932

Big bear market rally from Nov 12, 1929 to May 17, 1930. Lasted 6 months. Was the longest BM rally in the 29-32 crash.

This bad boy rally has continued since Nov 20 low of SPX at 752. You can use March 6th as a reference but look at the trendline and this rally is huggee. Also, after March the gov announced its policy of not letting the too big to fail banks fail. With investors knowing this the new rules have been set. Were now in July and its been 9 months since this beast has continued. Will we retest the lows?? I dont have a crystal ball so heres my projection. If we do break through 666 on the SPX it will be years from now. This market is heading higher.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Stocks continue to rise, SPX up 8% since recent 869 low

I don't know if you saw my post in the enrolled-only In Session thread, but I basically posted the same thing. I think this rally will continue until no one dares to short it. I think traders were very quick to jump on the shorting bandwagon this last month, and thus we saw a short squeeze these last few days. 

Overall, the fundamentals of this rally are trash in my opinion, but its not going to roll over if traders are bearish. The "smart money" is not buying this rally, but the "dumb money" is not fully on board yet either. A couple more days like this, and we should see a buying panic of historic proportions.

I can hear CNBC now "Inflation is coming! Inflation is coming! Inflation is coming! Buy or Perish!"

When everybody abandons their short positions, I'll be watching. 

Oh, and 666 on the S&P will be toast before this year is finished, in my opinion.

investorzzo's picture
investorzzo
Status: Diamond Member (Offline)
Joined: Nov 7 2008
Posts: 1182
Re: Stocks continue to rise, SPX up 8% since recent 869 low

One thing is for sure, while the banks are releasing new shares to sell on the market,  I doubt the markets will tank until they sell them all.  Get the suckers  to scoop them up  while the markets are up and then  the bomb schell will drop!  The Main reason Goldman Sachs did so well, is they sold some Chinese bank or interest in it for a billion dollars. Record earnings to sell more stock. Look for my next post. 

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: Stocks continue to rise, SPX up 8% since recent 869 low

Oh, and 666 on the S&P will be toast before this year is finished, in my opinion.

That low will hold man we havent even touched the low 800 level in a loooong time. Especially when we break the 1000 level who knows how high it could go. 1100??? In this environment tough but not impossible.

Fundamental 1: no more "systemic" risk, just little companies and households liquidating by the day.

Fundamental 2: the fed is pro inflation, pro paper printing

Fundamental 3: US creditors are too scared to alter the status quo. They will continue to lend us their hard earned money to their detriment. Think of it as a global stockholm syndrome.

Conclusion: no more major shocks to the system. Difficult opportunity for the little guy. Make your money, stay out of debt, and life your life as happy as you can. The doomers have had their day. Now its time to move on.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Stocks continue to rise, SPX up 8% since recent 869 low
bearmarkettrader wrote:

The doomers have had their day. Now its time to move on.

And you call yourself Bearmarkettrader, good thing your going into law. Just 3 weeks ago you posted this Time to short the weak banks and consumer discretionary names

Sorry if that came across as harsh...I don't know how anybody could study for the BAR exam and have enough time to watch the markets. Good luck on your exam.

Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Re: Stocks continue to rise, SPX up 8% since recent 869 low

I have short bias on the weak names but not on any other names

Notice how i included this in my initial posting. I still believe thats a good bet. Look at CIT go byebye. Many other financials and retialers will go bust in this market. You just have to know which ones to knock down. Many REITS will join the ash heaps where WAMU, LEHMAN, and now CIT will go. Do the research and you can still make a killing. Too busy studying 17 bar subjects to give that detailed of an analysis.

Oh yes the bar sucks but u cant JUST do bar prep otherwise you go crazy. You blogosphere people have kept me from going wackjob as i dont see too many people nowadays.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments