Tag Archive for 200 day moving average

S&P 500 Trading Below 200 Day Moving Average

Hold the phone folks! This could be the big one… I wouldn’t own the market index funds if I were you, instead I would be looking for some short ideas like CRM, AMZN, LNKD, etc… We were pretty “lucky” with our calls so far and we still feel the “Hyper-Stagflation Trade” is due for a serious comeback (IE don’t sell your hard assets but short some stock with a tight stop order right at the 200 Day Moving Average on the SPY 1 year chart).

I may have toked a joint or two in my day and maybe Arizona State is not the Ivy League but I do have a degree in Finance, 10 years plus of financial market knowledge and the wisdom to say “hey, diversify a little out of those crappy slips of paper you own known as technology stocks.”

Look, investing here on the long side in anything other than gold or whatever is probably a total longshot. Given that every single Algo-Bot in the entire world is going to short the market beneath the 200 day moving average, you are fighting the smart money. With that being said, while we feel feel Bernanke is close to running out of bullets, we also feel he is skilled at creating one-day melt-up traps for short sellers. I secretly feel Dr. B loves nothing more than disrupting the natural flow of the stock market and the power that his market manipulations command, but we’ll never know his frame of mind when he decides to rip the faces off of some shorts.

The RSI is too oversold for the market model to switch to short here, though we certainly think the evil robots will send the markets into the abysmal pit of a deep bear market in the medium term. All in all, hold your gold and buy some puts on CRM, QQQ, and AMZN.

Markets Getting Clobbered: Watch the 200 Day and 50 Day Moving Averages

Because that’s all that anyone really cares about right now. Yes, the derivatives mess, the implosion of the Euro-zone via debt, and the various other debt related issues are still quite prealent but the main thing traders with money who move the markets will be following is the 200 day moving averages… If you are looking to short some equities here, I suggest selling call options on the following stocks or index funds…

QQQ

CRM

CMG

AMZN

IWM

SPY

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Keep in mind you want to have some “long hedges” as well…

Even Though the Market Model Stopped Out When the QQQ Traded Above the 200 Day

We are not buying into this rally for our readers and would be either long short or net short…. If you listened to our Saturday posting you saw that the market opened higher on Monday and continued higher today which meant our market model call on Saturday was null and void as described in that post. While we get it wrong many times and are certainly not perfect, the reasoning behind our belief in “stuff” over stocks remains pretty strong for the average investor looking to invest in the average stock.

LinkedIn, Amazon.com, Pandora, etc… all look too pricey to me at current valuations and the average Nasdaq and S&P name also looks fairly valued to overvalued from a bottoms up perspective.

We are certainly not perma-bears but we also aren’t big believers in efficient market theory, the Markowitz assumptions, or any dogmatic ideals that suggest that stocks MUST rise more than, say, fancy color diamonds or farmland over the longer term. Therefore, we feel a diversified approach with an eye on resource scarcity and macro economics makes a good deal of sense.