Here we go again!
Yet another low-volume, BS rally takes us back to the “breakout” level of S&P 2,100 and we get moves like this because TA sheeple are so easy to fool that fooling them has essentially turned into a profit center at many iBanks and Hedge Funds.
After all, what is the value of a stock if not whatever the last idiot paid for it? Since that actually sounds like a puzzle to most of the people reading it – we Fundamental investors will always have a tremendous advantage in almost any kind of market – EXCEPT THIS ONE!
This market, like any bubble market, is a fool’s paradise that rewards the rats for hitting the BUYBUYBUY button – over and over again. Train them well enough and, long after the cheese stops coming, the rat will still keep hitting that button, over and over again – until they have no money left to buy with – and then they seem downright surprised when they get dissected at the end of the experiment!
Look who “won” the most recent round of S&P madness. All the most shorted stocks led the rally – almost as if SOMEONE were purposely squeezing the stocks to force people to capitulate and buy some of the worst stocks in the index – just to provide enough energy to get us back over that 2,100 mark one more time. How manipulated was the action? So much so that, at 10:35 am, I was able to say to our Members:
As the moment we have Dow (/YM) 17,684 (85 off the recent high), S&P (/ES) 2,085 (9 short), Nasdaq (/NQ) 4,669 (21 shy) and Russell (/TF) 1,166 (down 10). Figure they make an effort to get those back and a failure at 17,750 or 2,100 or 4,700 or 1,175 are all good potential short entries.
We hit our targets right on the button so, at 3:05 pm in our Live Chat Room, I said:
So now we’re at 17,739, 2,097, 4,692 and 1,184 so the RUT popped more than we thought but, then again, we knew that one was behind the others – so it makes sense it would move up the most. NYSE only up just over 1% and that one too is behind (10,582), so not confirming – which makes /TF a good short at 1,185 (tight stops above) and, of course, the other lines are still good shorting targets.
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