Stocks for the Rest of Us
Posts tagged bear market rally
The Market Is Approaching The Top Of The Range; Get Defensive
Dec 16th
I’m getting defensive as the market approaches the top of the range. The rally today on the news that the Fed is basically doing anything and everything it can do to “help” the economy seems counterintuitive to me. How is it a good thing when the government has to step in and do all kinds of crazy tinkering that no one really understands to keep our financial system from failing? I don’t think it really can be so my guess is that this rally will eventually fizzle like the rest of the bear market rallies we’ve seen. People always say “don’t fight the fed” but it would appear that betting against the rallies that have followed fed rate cuts is a winning strategy.
For now I’m going to let the rally play out a bit. We might rally to 1000 or so on the S&P but I expect some retracement soon. Whether we’ve seen the lows or not is a fool’s guessing game but as long as you move quickly and keep losses contained you’ll survive.
Bear Market Rally Underway: SSO For The Win!!!
Nov 13th
We bounced hard just below the old lows this morning in the S&P 500. I initiated some longs in the form of the double long S&P 500 ETF (SSO). Volume in the SPY was huge so there are clearly some large buyers coming in and buying. I’m keeping an eye on the old lows but the target is again going to be around 1000 on the S&P 500. The fear of being left behind is definitely kicking in here and causing this enormous rally with momentum on the upside. If it continues at this pace I’ll be looking to sell probably within the next couple days.
Update: This is why stops are so important. Keep them tight and positions small and you will survive.
Sell Into The Rally As We Approach Resistance
Oct 31st
As I mentioned in my last post I had increased my long exposure as we bounced off the old lows around 8000 in the DOW. I picked up various commodity names, some retailers, banks, and tech stocks and I’m now looking to unload the bulk of them as we approach 10000 in the DOW. At this point in time there’s really no evidence to suggest that the trend is starting to turn around and this is anything more then a bear market rally. At the very least I would consider putting on some hedges in the form of short ETFs as protection in case we visit the lows once again and approach the top of the current trading range. If you’re greedy you can hold on for a little bit longer but in this market greed will get you killed.
S&P 500
Bear market bounce is still in play
Aug 13th
The bear market rally is still in play. There’s nothing wrong with a little profit taking and this bounce coincides nicely with a bounce in the energy and commodities complex. I’m a little concerned with resistance here at the 50 day moving average but so far the indices are holding up and the lack of follow through on the down days coupled with low volume selling bodes well for more upside. As long as the selling is contained I think we can work our way higher. Having said that, the market still sucks, keep those stops tight and protect capital. MACD and MACD Historgram have yet to show signs of a bearish divergence but I feel like that may be coming soon and that will be the tell to get out.
S&P 500