It was a disappointing day for the Bulls. I came in today looking for an excuse to buy equities — and I never got it.

As noted in the Smithers piece, markets may be due for bounce — he thinks due to buybacks, I think due to oversold conditions.

The inability to maintain a strong opening, despite the deep discount from a month ago and the oversold condition makes me wonder if there isn’t more weakness to come.

Bottom line: I did not see any reason to buy ‘em here yet.

Category: Markets, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Weak Bounce, No Follow Through”

  1. Robespierre says:

    “Bottom line: I did not see any reason to buy ‘em here yet.”

    But would you short gold?

  2. techy says:

    IMO .. Gold is trading based on currency devaluation everywhere (new one is EURO).

    But I am neither going to be long of it, nor short of it….something which trades based only on a notional value but no other usage value….hard to say it is cheap or expensive…

    it can go to $10000 or it can go to $200.

  3. Chief Tomahawk says:

    Guess Warren Buffett was smart to sell his Goldman stock at $150…

  4. nofoulsontheplayground says:

    The charts are still looking an awful lot like Oct. 2008 here. Another oversold bounce is likely to start tomorrow. However, anyone who thinks the French CAC can give up 70% of the advance off the 2009 lows while the S&P gives up less than 20% should look at the 2002-2003 lows as well as the 2009 lows.

    In the end of the drops off the 2000 and 2007 highs, every major western equity market, ex Japan, was fairly aligned at the eventual lows. The S&P’s move off the 2011 highs should eventually align with the CAC and other western markets.

    Everyone is looking for The Bernank to announce some big policy change at Jackson Hole like last year. The contrarian in me says the majority are going to come away disappointed.

  5. rktbrkr says:

    BAC CDS closed at 380 nearly equaling their record 400 before the 2009 bailout. Charlotte, we have a problem…

  6. macrotrader603 says:

    BR — buy uptrends and sell downtrends. This market is to be sold for now.

  7. macrotrader603 says:

    Shorting gold is another ridiculous failed trade. Many have tried it the past few weeks and gotten run over.

    Buy uptrends and sell downtrends…there are much better shorts than gold…sell weakness…sell the banks…

  8. JasRas says:

    The action today started with the classic futures pump. It’s a can’t lose method. Either it takes hold and runs, or you can sell your stock into the slow drift down. A levered pump allowing for a non-levered liquidation of stock is a good trade off in portfolio management. I still think short term that the markets could push to 1180—hitting a lower high—unfortunately I am not sure that the speed of news is going to allow for this opportunity.

    As much as people want this to be “the end” and are looking at various signs (lower new highs than a couple weeks ago, sentiment, valuation, etc…), the reality is that we (the U.S.) are not leading this dance. We are at the behest of Euroland and their problems. So while by many ways we can be “oversold”, “stretched”, “under-valued”, etc…we are being nearly completely driven by news flow from Europe. Technicals come in second, fundamental a distant third. This is reality. It is not “book smart” it is macro, it is behavior, it is political.

    The fundamentals will hopefully indicate that we as a country and market will prevail. We’ll recover first and best with regard to our company balance sheets. The economy could be another story…

  9. Bill Wilson says:

    It feels to me like we will crash right through 1100 on the S&P500. I suppose rallies start when you’re sure things are headed lower.

    Either way, I think the reaction to 1100 will be an important tell.

  10. theexpertisin says:

    I did add to my already large position in Cuggino’s Permanent Portfolio Fund. I piggyback onto his basic portfolio strategy to enhance some aspects of it (especially securities selection and the SF).I achieve modestly better results because I negate his usual large cash position (16-20%).

    Overall, I agree. It is not yet opportune to buy back into the market in any significant degree.

  11. Rouleur says:

    —1050 on the S&P…is still the location of the mid field scrum…flexy bend my trend

  12. royrogers says:

    “# Robespierre Says:
    August 22nd, 2011 at 4:52 pm

    “Bottom line: I did not see any reason to buy ‘em here yet.”

    But would you short gold?”

    shorting is like putting an ear on a train track when the train can be seen approaching

  13. philipat says:

    The problem in Europe is, again, the Banks. ALL Banks, not just European. The markets want Germany to sign a blank cheque to support the profligacy of peripheral Europe, thereby avoiding another round of Bank bailots. This may be great for the markets and for German Corporations but, hey, here we go again. The German taxpayer will not support it because there is no reason why they should work even harder and make further sacrifices to allow a Greek civil servant to retire at 50 with a EUR 150K pension and to save the equity holders ,bondholders and managements of the Banks. Follow the money. It leads again to our friendly Banksters.

  14. JasRas says:

    Look at the major indices in Europe and you’ll see we are behind the curve and to “catch up” we’ll have to chew at the 1100-1050 range at best, and at worst it fails as it has for the Cac40 or the Stoxx60. So, assuming things get worse in Europe due to slow acting leadership, one should be prepared for the worst. Remember though, bear markets can have powerful 1-2 day rallies. Look for those to take defensive action according to your tastes…

  15. smedleyb says:

    Yes Barry, the market is oversold, so the natural inclination is to buy. But as they say, crashes come from extreme oversold conditions; Germany and Europe have been taken behind the woodshed, and we might be at the cusp of a pretty violent washout ourselves, testing anything from 1050 to 950 over the next several weeks/months (days?).

    That said, you know the Bulls will scream double bottom as long as 1100 holds. Tech names seem very vulnerable, however, which is putting a huge damper on my desire to want to get bullish for a trade. The BKX is breaking down anew, the DAX is trash, and gold is going all parabolic, which can’t be good for stocks in the shot term.

    I’m inclined to think these levels hold — for now — but can’t pull the trigger, which in turn really makes me want to buy something!

  16. carleric says:

    There is no reliable way to guess what a panicked academic trying to please several mastes will come up with at Jackson Hole so shorting seems particularly dangerous right now. I can’t even be long in this environment. I just tighten the stops on my gold and silver, open a cold beer and sit on my patio contemplating life. And its not too bad

  17. macrotrader603 says:

    royrogers Says:

    August 22nd, 2011 at 9:00 pm
    “# Robespierre Says:
    August 22nd, 2011 at 4:52 pm

    “Bottom line: I did not see any reason to buy ‘em here yet.”

    But would you short gold?”

    shorting is like putting an ear on a train track when the train can be seen approaching


    Shorting is fine, as long as you short weak markets…shorting strength is a fast way to the poor house

  18. Trading positions:

    Oil trading position: 0% cash
    Gold trading position: 100% cash