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Ben - I am not sure why I am posting this. But, I will put in enough
hemming and hawing to make me sound like an economist. I especially do
not like talking about stocks. I mean, people have been calling for a
crash in equities for I don't know how long. I reserve the right to
change my mind between the time I finish writing this and click send on
my mouse.
Here is what I am thinking:
1) Bonds near s-t bounce time. My preferred count is that they hit a
medium and maybe long term top on July 2 in a 5th wave failure. Move
above mid-123s in this rally would put that into question. Prefer move
up in YIELD toward 6.10$, even 6.38/50% possible. I am not yet prepared
to comment on whether this is a longer term bear (7-8% or if we go on
back down to 5% or less).
2) I had expected stocks to slip last week. Oops. My picture had called
for a 3-5% drop in hear followed by a final rally to 1220 area on spooz
into October, then the start of a real bear market (below 6000 on the
dow). This rally could speed that top up.
Let me repeat something I sent to another person on this list. I do not
just look at wave counts on their own since there are about a million
different ways to look at these counts, they being so subjective. I look
at sentiment, intermarket relationships and classical technicals too.
Stocks have huge divergences in them. They have had them before too. BUt
wave counts are pointing to a turn soon (soon being relative here). This
is one reason why I am not as sure as I'd like to be that bonds will
enter a bear market (7-8% yields) just yet. A crash in stocks, unless
caused by inflation (sorry for the fundamentals), is not likely to be
seen by hugely higher rates. Thus, my reason for being only moderate
bearish bonds and taking it a step at at time.
Another caveat - My expertise is more in bonds and currencies than
stocks. What is worrying, from a bearish perspective on stocks, is that
everybody seems to be looking for a top in stocks almost immediately.
This would be the most widely advertised market top ever! Hard to
imagine that happening until everybody throws in the towel, or whenever
my put options expire anyway.
DISCLAIMER - I've had alot of good calls on bonds this year and am
overdue to crash and burn.
Steve
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