Anyone going long stocks here?

[etftalk]

I'm looking at the early results of the TSP Talk sentiment survey and it's 23% bulls, 61% bears. That has the makings of a bullish run for stocks.

[XL-entLady]

I'm looking at the early results of the TSP Talk sentiment survey and it's 23% bulls, 61% bears. That has the makings of a bullish run for stocks.
I'm thinking about it hard because I think that gap in the S&P is going to be plugged. I'm just trying to decide if it should be SPY (tracks the S&P) or if I'm sure enough of the move that it should be SSO (S&P 2x Bull) ....

Decisions, decisions! :unsure:

Lady

[etftalk]

A repost from TSP Talk:

I am looking for a little oversold, options expiration, overly bearish rebound. This play actually looks so obvious that it may be a trap.

The early survey results today are 23% bulls, 61% bears.
There is a large gap up near 825 (Currently 789).
The break of the wedge is at the same spot (825) and a rally back to the old wedge support line is very possible, but it should act as resistance.

The problem is, I am hearing a lot of talk of this bounce, and that makes me a little nervous. It could become a self-fulfilling prophesy, or it could be a "do the opposite". The herd appear too bearish and that is a good sign and could be the tie-breaker.

[XL-entLady]

After thinking about the S&P trade, I decided that I'd better stick with "when in doubt do nothing." I only have about 15% of my Roth in cash right now and there isn't anything I want to sell to free up more $ if I find an ETF I can't live without.

So since I didn't go in, the S&P is surely going to spike up!

Lady

[etftalk]

So since I didn't go in, the S&P is surely going to spike up!
That IS the way it usually goes, isn't it? :)

[Here$14U]

I'm strictly staying on the short side of the market at this time. Looking at the S&P chart it appears we may be accelerating down. 5day moving average is pulling away (downward) from the 20day moving average. MACD indicator is starting to fall now too.
My current holding is TZA (3xshortRussell2000) as its 5dyma is moving faster upward from the 20dayma. I think this market is going down, futures are down as I write. The news is very bearish, advance/decline line is in freefall. Could be crash time, beware. Here$14U.

[etftalk]

Some info from www.sentimentrader.com (http://www.sentimentrader.com): 2/20/09


"A short-term setup we've discussed a few times is that the market tends to rebound when we see 3 consecutive days of very weak breadth on the NYSE. This week has certainly qualified, as the Up Issues Ratio on that exchanges has been under 33% every day.

"The last time we've seen three straight days with less than 1/3 of NYSE issues managing a rise was November 12 of last year. The S&P gapped up the next morning and rose more than 6% during the day.

"But this morning, unless things turn around in a hurry, we're seeing a fairly substantial gap down, with the S&P indicated to open more than 1% below yesterday's close. Looking over the past 25 years of history, there were only six days when the the Up Issues Ratio was under 33% for three days, then the S&P gapped down by more than -0.5% the next morning.


"Those dates were 08/09/82, 04/14/87, 10/19/87, 04/04/94, 07/24/02 and 10/10/08. Each one of those occurrences coincided with at least a short-term bottom that day. The average intraday drawdown (excluding Black Monday in 1987) was around -1%, but (again excluding Black Monday) the market reversed to close higher than the open each time. If you had waited for the close to buy instead of the open, you would have avoided the disastrous drawdown in October 1987 while still being able to participate in further short-term gains.


"...when were the last two "Dow Theory" sell signals, according to when they both closed at a new three-year low on the same day? October 9, 2002 and October 3, 1974. Over the next three months, the maximum drawdown from those two instances averaged -2.1% and the maximum gain averaged +21.2%. Some sell signal, that."

[XL-entLady]

I've read several technical articles this morning that are saying essentially the same thing as the SentimenTrader article below. I didn't go long yesterday but my finger is on the button this morning .....

Lady

[etftalk]

Grasping for any signs of life, I see the Nasdaq is showing some relative strength. Dow down 144, ES (S&P) futures down 17.00, NQ (Nasdaq) futures only down 5.75.

[XL-entLady]

I just bought into S&P in my ocean retirement account. My tugboat Roth is already almost fully invested elsewhere.

Lady

[etftalk]

Good luck. It's tough to buy into the fear. It usually pays off but once in a very great while, as !$U said, it turns into a crash.

The bounce will come. The question I have now is whether it turns into something more intermediate-term in duration, or stays a short-term pop.

Last fall I stayed in and got burned. Fool me once... But once I think I know what's going to happen, I should expect the opposite to happen. :wacko: