Online Stock Trading | Bears stepping aside waiting for the FOMC train to leave the station

Bears stepping aside waiting for the FOMC train to leave the station


Filed Under Market Commentary |

Not much in the way of market commentary, this market is waiting on the FOMC to make a move.  Bears simply aren’t getting in ahead of the FOMC announcement.  CBOE Total put/call ended the day at .85 signalling there aren’t many short bets on the table.  I can not blame them although, Ben Bernanke insists on letting the market know that he is willing to do what it takes.  Of course this is all just noise to me, price volume action points to a trendless market and we have a confirmed market rally off the lows. 

Troubling signs for the bulls are the number of stocks making new highs versus new lows.  On Wednesday, there were 130 New Highs compared to 172 New Lows.  Not the kind of ratio we’d like to see in a fresh new bull market.  This isn’t the end all be all indicator where this signals this rally is over.  However, it shows the lack of conviction to the upside at the moment.  I may remind you that last years rally looked a lot similar to the one we have now.  If you ignored that rally, you missed a 22% gain on the NASDAQ and a 15% gain over in the S&P 500.  Goes to show you how the market likes opinions.  Bottom line, preidctions are meaningless and a slight long bias with a good amount of cash is the recipe for success.

“Those who have knowledge do not predict, those who predict do not have knowledge.”

For those of you who watch CNBC, Blooomberg, Fox Business Channel, etc…remember this quote when listening to “market mavens” or “expert panel” most of these guys can not beat the S&P 500. 

Cutting losses helps here too, keeping a tight cut loss helps prevent a massive attack on your portfolio.

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Comments

One Response to “Bears stepping aside waiting for the FOMC train to leave the station”

  1. Thursday's Trade Does Nothing to Change the Current Market Environment on September 14th, 2007 6:30 am

    […] Another price advance on low volume, this story keeps repeating itself.  What is there to add to what I’ve already said.  Can’t think of much that the Bears move here has come quite obvious.  Rather than repeat what I said yesterday, go ahead and read it here. […]

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