Has this market been crazy for the last 3 months or what??

[mrmarket]

Geez...no idea where it wants to go. So sensitive to daily news anymore:

[mrmarket]

Look how many big daily moves there have been.

[billyjoe]

.........and we still love it !

http://www.youtube.com/watch?v=K-wJNpWgss8

----------billy

[skiracer]

.........and we still love it !

http://www.youtube.com/watch?v=K-wJNpWgss8

----------billy

I hate it. cant make a true determination of a specific trend either short or long. I refuse to really trade in this environment. I would rather go play poker somewhere where my skill can create some type of edge. this market is pure and simple gambling which is dependent on luck. no edge in that.

[BesV]

I'v never seen European (dutch) stocks go crazy like this....but it's just a matter of time before we see new lows

[em26jamie]

Back in August, I dumped everything and went cash and started trading in and out on the volatility. I've done pretty well too. I was in and out between AGQ and ZSL for a while, as they were giving 5% price swings every freaking day. Then I decided to play the earnings releases and did well there too. I took in BIDU, EOG, HLF, and CLR. Only HLF did me wrong, but they still had good earnings. This morning I got 3.5% from SDOW because I just knew the DOW wouldn't be up triple digits 3 days in a row in this market. I'm all cash for the weekend. Too much stupid stuff can happen over the weekend anywhere in the world to screw us around. I know I'm gambling, but I feel I'm picking favorable spots to do it. NOG is reporting next week. I've seen NOG mentioned on here a few times. I'm still kicking it around, but haven't yet decided on it.

Looking back though, one of the first Mr Market picks I bought was PSMT last December at $34. It's around $75 now. If I had just held that all year, I would have been better off, both in gains and taxes.

[Websman]

Penny stock trading has been very good to me...but I don't recommend anybody else try it.

I have been contemplating options trading, but I'm not quite ready to throw any real money at it yet.

[peanuts]

Look how many big daily moves there have been.

On a technical perspective, when volatility decreases and a trading range is established, then everything is set up for a breakout one way or another.

If we step away from that chart and expand the time horizons, then maybe this large range that we have been trading in for the last few months may look like low volatility when compared with the upcoming move, positive or negative:



My guess is that we are going higher... world wide, the US is the tallest midget. If you were to invest in any region or country, the US & Canadian equity markets are one of the best values out there. Europe is in a mess, Brazil is on hold, Africa carries too much risk for most, Russia has political issues, China too, Japan glows when the lights are off, Australia is too small, India is too disorganized, and the rest of the world feeds off of US activity. So, rather than holding fiat currencies, portfolios will most likely trend towards holding currently undervalued assets.

The recent volatility may be a result of a rebalancing of portfolios... away from financials affected by Europe, and into US firms with worldwide impact... AAPL, GOOG, MCD, KO, etc.

[mimo_100]

Here is one person's theory about what is behind the recent wild last hours of trading:

http://money.cnn.com/2011/11/08/markets/leveraged_etfs/index.htm?source=yahoo_quote

[mimo_100]

On a technical perspective, when volatility decreases and a trading range is established, then everything is set up for a breakout one way or another.

If we step away from that chart and expand the time horizons, then maybe this large range that we have been trading in for the last few months may look like low volatility when compared with the upcoming move, positive or negative:



My guess is that we are going higher... world wide, the US is the tallest midget. If you were to invest in any region or country, the US & Canadian equity markets are one of the best values out there. Europe is in a mess, Brazil is on hold, Africa carries too much risk for most, Russia has political issues, China too, Japan glows when the lights are off, Australia is too small, India is too disorganized, and the rest of the world feeds off of US activity. So, rather than holding fiat currencies, portfolios will most likely trend towards holding currently undervalued assets.

The recent volatility may be a result of a rebalancing of portfolios... away from financials affected by Europe, and into US firms with worldwide impact... AAPL, GOOG, MCD, KO, etc.

Peanuts,

In the chart you posted, the S&P closing price went from 1099.23 on October 3rd to 1253.23 on Friday November 4th, an increase of 154 points or approximately 14%.

I calculated the 10 day moving average volume during that same period. The moving average went from 5.185898000 billion shares on October 3rd to 4.730725000 billion on Friday November 4th, a decline of about 445 million shares or approximately 8.58% lower volume.

It appears that this index is advancing on lower volume. I would like to see it going higher on higher volume.

Of the 4 possibilites,

Higher closing prices, Higher volume
Higher closing prices, Lower volume
Lower closing prices, Higher volume
Lower closing prices, Lower volume


I think that only two of these are “good”. What do you think?

[wooish]

The higher we go on low volume, the harder and faster it will fall. The market has been advancing out of thin air. With so much debt and issues with the economy, the only reason I can think of is Uncle Ben and his PPT is at work bringing the market higher. He had said it in numerous times that they're inflating the stock price to bring back consumer confidence to spend.

[peanuts]

I have to agree that I like to see volume on moves before getting a firm conviction of direction. However, I also have to look at some fundamental reasons why direction may be up or down. With the immense printing of money there is sure to be inflation. The trickle down effect theoretically should result in higher prices for everything, including equities, as there is more money in the system. But, with volume being lower as you have reported, it is concerning that the prices are rising without this money flowing into equities. Perhaps it is smart money moving in before the rush of dollars, or perhaps it is manipulation of some sort. One thing is sure, however, it cannot be due to the economy improving or even looking to make a turnaround. The reality is that investors need to keep their money active. Sitting on low yield risky bonds, depreciating real estate, negative yield cash, or other bad investments isn't going to be on the top of anyone's list of investments.

[wooish]

Peanut that is what uncle ben wants to do and that is to press interest rate so low and force people to take more risk on higher yield equity. However with so many people out of work and lost most of their savings during the financial crisis they can't even keep up with
their living expenses

[peanuts]

Peanut that is what uncle ben wants to do and that is to press interest rate so low and force people to take more risk on higher yield equity. However with so many people out of work and lost most of their savings during the financial crisis they can't even keep up with
their living expenses

This is so true. I hear stories so often in regards to people pawning off heirlooms to pay the rent or electric bill. And then I hear all these stories of able-body people wanting more government handouts rather than tracking down a job that might not be what they want but is still more than unemployment. This welfare state is getting bigger, and the end result isn't too pretty. Tax revenue will not be able to keep up with handouts, so the FED will have to print.

This really is a huge transfer of wealth... from the US to our bond holders across the pond(s). Will those bond holders ever come to the conclusion that it will be better to own US companies rather than US debt? Maybe, or maybe Ben will pull this off

[mimo_100]

I signed up years ago for a free email copy of this management company's monthly report to their clients. As a non-client, you get it a month late, but it is still good reading.Here are the last few paragraphs of the September 2011 Newsletter:

When we look at how previous long-term bear markets have progressed, the rally in stock prices from the March 2009 low through the high in April of this year occurred at the same time as previous bear market rallies (relative to the peak of the previous bull markets). In the handful of previous cases we have to study, these rallies were not something to commit to for the long run—they were trading opportunities within larger bear markets, which eventually gave way to additional declines. Up to this point, there isn’t anything about the rally from the March 2009 low that makes us think that this time is any different.

One of the most difficult things to anticipate in the markets is just how extreme sentiment will get before a trend ends. Market rallies can go on much longer than most investors and traders think possible, and so can declines. Advances and declines can also end earlier than most people expect. Over the past year stock prices climbed higher than we thought they would in response to QEII, but that didn’t change the basic nature of the opportunity—or, more precisely, the lack thereof.

However, there appears to be a good possibility that we will be given a more long-term opportunity within the next year or two. The sovereign debt crisis in Europe and the deficit and debt problems here in the U.S. are starting to hit the markets just when history suggests we should expect another significant decline in stock prices that could leave the market in an attractive position, relative to valuations and long-term cycles.

The likelihood of another significant decline is one of the reasons we have tended to be more cautious in our portfolios over the past year and a half. However, it is also reason for guarded optimism, because history suggests stock prices could start to trend higher for good once we get through this next phase in this bear market.

Hedged Growth and Dividend Growth have spent most of the past four years in a hedged or market-neutral position, because since 2007 the market has been in the middle of a strong period of contracting valuations. However, our default stance in these portfolios will change if stock prices are poised to head up in a durable trend higher, supported by attractive valuations and bullish cyclical evidence (e.g., the charts we have discussed in this letter).

Hedged Growth and Dividend Growth both have their greatest potential return when they are fully invested in a strong market, and so we would very much look forward to seeing the type of market environment that enables us to switch to a fully invested stance, by default. For now, however, we remain defensive as it appears another significant contraction has begun.

In Absolute Return, we remain defensive with regard to stocks, but positioned for continued gains in gold and related shares. We still have over 50% of the portfolio in cash, cash equivalents and index hedges, which gives us tremendous flexibility to increase our exposure to stocks, commodities and other risk assets when the outlook brightens.

While gold hit a high just above $1900/oz in August, the decline since then has been quite shallow relative to previous gains. This strongly suggests this will prove to be another temporary “rest stop” before prices begin another advance. It is certainly possible gold could go through additional short-term declines in the weeks and months ahead, and much of the volatility in Absolute Return and Commodities Focus I is now due to gold’s price swings. However, with the bull market in gold firmly intact, we remain well positioned to benefit from a continued advance.

As always, if you have any questions about your account or issues discussed in this letter, feel free to contact us.

Sincerely,
Brian McAuley
Chief Investment Officer
Sitka Pacific Capital Management, LLC
[email protected]


Here is a link to the newsletter archive:

http://www.sitkapacific.com/client_letters.html