Getting to be a rough neighborhood again, isn't it?
Whenever the market's been up for a while, the bully-boys come out. Some comments are serious, some are sarcastic, but a few merit a reply. I thought I'd tackle a quartet of these on this fine Sunday morning.
KillinMe writes:
You seem to try & tackle uptrending stocks at their highs, even though they keep making new highs. Do you ever buy puts on downtrending stocks? I gather you are a counter trend trader at the core. A true contrarian at heart.
REPLY: A bunch of my positions are uptrending, yes, and some are very near their highs. I guess you could say I'm aggressive right now. Some of my puts are on stocks that have already lost plenty of their value, though. AKAM springs to mind. In any case, yes, what I'm doing is somewhat hazardous, but my positions are spread thin enough and my stops are tight enough to protect me.
Dangit writes:
Blame it on Bush!…Beautiful Tim…..anything else?….global warming?
REPLY: I suppose this was prompted by my jab at the rebate checks going out. First of all, there was no "blame" anywhere in the post. I frankly think Presidents get way too much credit (Clinton) and way too much blame (the first George Bush, back in 1991) for when the economy is doing well or poorly. Economic trends are much larger than the man that happens to be living in the oval office at the time. But the public isn't that sharp, so they tend to create a false causation between the executive branch and the stock market.
Boomkap writes:
On what basis are you making the bearish argument for FSLR? There is nothing technically to indicate that the trend is going to reverse. Are you just speculating that FSLR will have earnings that do not meet expectations and the stock will tumble? Show me the Technicals on this. Many of your trades are based on "anticipation" of trend reversals. This is speculative rather than being based on Technical Analysis. One of the golden rules is – Dont short sell a stock just because it is too high 🙂 Same Story with Crude, no reason to believe the trend is going to reverse. With GOLD, there is a real trend reversal and it has indeed turned bearish for the short to medium term.
REPLY: Of my two solar plays, FSLR and SPWR, it is true that SPWR has a far, far better technical argument. As for FSLR, I'm in it for a couple of reasons. First, the volume has been completely divergent from the strength in price. Second, and much more important, what should have been a terrific bullish breakout is completely limp and malformed (see yellow tinting). If this thing has great earnings, goes to $350, and my options are blown to bits, I won't be shocked. But I'm willing to take the chance given the prospect of the stock just as easily going to $250.
Finally, fatcontroller writes:
Bears reason too much. But it's wrong to trade on reason. A good example is DECK. You'd think that people would stop buying ugly and expensive boots in a recession. Yet the sucker came out swinging, knocking 21% off bears' position. Another example is GOOG. You'd think that people would search less when they have a lot less money to spend? Yet the pig came out flying, taking $100 out of bears' pocket in one day. I always maintain that it's impossible for anyone to have an accurate grasp of the fundamentals. Most economists are wrong even though they put their lives in the matter. Most ANALysts are wrong even though each of them only research a few companies with all their stupid time. My point: don't ever make a trade based on reason. While I'm at this, I hope everyone here would stop making idle predictions on the market or stocks. It's a total waste of everyone's time. And it might lead a few innocent souls into wrong trades.
REPLY: There is so much wrong with this post, it's almost impossible to know where to begin. So I'll use bullet points and go in order……..
- Yes, bears reason too much. I will actually give you that point. And I actually consider it a weakness, since the market (and the bulls) are pretty much airheads. But they are what drive the market most of the time.
- DECK is a stock I follow, but I don't think I've ever placed a trade on it. And even if I were to discuss it, I doubt I'd use the style of the boots as a reason for an interest in the trade.
- As for GOOG, I think it's pretty widely accepted the entire world was wrong with this one. If you were one who bought calls beforehand, my hat is off to you, but I strongly suspect you are simply making judgments based on hindsight, which anyone can do.
- "...it's impossible for anyone to have an accurate grasp of the fundamentals" - I agree. Which is why I'm a chartist.
- You go on to state that no one should trade based on reason, and that people should stop making predictions on markets or stocks. Well, I trust you won't be wasting your time here anymore. Because the board is based on reason (more or less), and it certain endeavors to entertain where markets and stocks might be going.
Well, that's enough. The Sunday Times awaits. Adieu.
