Industrial Production & CPI

industrial productionAs I said in the previous post, I was waiting to see how we closed out today's trading session to draw a lot of conclusions about the recent selling and, as a result, bears came through. After what was looking to be a modest recovery from today's lows by close, stocks sold off the last 15 minutes, lowering the Dow more than another 100 points today. This being the biggest consecutive drop in the Dow since March. Having two days of rather aggressive selling gives good support to the belief that we could see a rather significant leg down at this point. Bulls are hoping that the dip will cause for more institutional players to be able to buy in, but that is much easier said than done. Despite all of the negative economic data, I am amazed with how positive investor sentiment has been in recent months. Such optimism is very hard to maintain in this type of environment, especially when things begin to look like they aren't getting better for a while.

Once again we saw pretty strong performances from the shorts. SRS is finally above $20 again, which is good news. FAZ is inching its way back above $5, where my basis still lies at $4.68. Emerging markets are undergoing a lot of duress as of late, especially with the ongoing battle of currencies, which makes EEV a strong consideration for me to pick up this week.

Industrial production came down significantly in May, after analysts were hoping for a stronger number, especially after all of the money spent and the depletion of inventories from the past several months. This is another indicator that indeed deflation could be around the corner, which I believe is a prerequisite to the market crash.

CPI is announced tomorrow, which many eyes will be on. We still are tracking very closely to the economic woes we found in the 1930's. It is scary when you consider the many similarities of the two time periods and consider what the possible consequences are. I am just trying to prepare myself and make some money when the opportunity presents itself, which I believe it will. We are getting close to breaking new technical barriers, so a sharper downturn could be a very real possibility if the selling continues. Just as quickly as the positive sentiment returned, it can be taken a way. It's amazing to think, that even despite the huge optimism that has been present as of late, and all of the buying we've seen in the stock market recently, the Dow still remains down 3.1% FOR THE YEAR. So there are many reasons to believe that we are not in a "bull market."

Once again, sustainability only adds to the momentum. Depending on how the markets move tomorrow and the volume, I will be most likely taking some more short positions. It is clear that more and more people are being forced to liquidate, and with more of that, bears should regain confidence and enter back in, bringing up the volume even more. Adobe issued negative earnings after hours, however, they were pretty much in line with expectations, so I don't see too much activity from their end. I expect some pretty good activity in my Zecco.com account in the coming week, especially as momentum increases. Happy Trading.

7 comments:

  1. Anonymous Says:

    I did a lot of bargain hunting today and yesterday. Short squeeze is underway. Volume is so low, and only panic people sold. I advise you to take profit on your shorts.

  2. Anonymous Says:

    It's "amazing" you doubt this bull market. Take this pullback for what it is, a pullback and go long. C'mon you know you want to.

  3. Anonymous Says:

    Dear friends,

    When I first entered the market back in October last year. I really didn't know how to make good trades. I used to panic and lose whether I shorted or went long. Then finally I learned how to make money. I will always work:

    1) Be patient.
    2) Never get panic
    3) Never trade on margin and have a lot of cash on the side.
    4) Choose a growth stock that has a good balance sheet and won't go bankrupt (do your own analysis to choose, dividend stocks are also good deals)
    5) Buy a portion on pullbacks (say 1/10 of your whole money)
    6) If it goes up, do nothing, but if goes down add more.
    7) do profit taking if needed.

    I think many people didn't even know these simple strategies like me and now are getting more and more informed. This means even a healthier and faster recovery for the stocks market. You may also easily hedge your investment by buying put options (for example for the same stock when you have good gains. remember that building a portfolio takes patience.

    Good luck to all.

  4. Anonymous Says:

    Anon,
    Your an idiot !

  5. Anonymous Says:

    Anon 4,

    Anon3 is right. You are loser. Keep buying FAZ and good luck, lol.

    If your average on FAZ is $50, just buy more and more. rofl

  6. LV iPhone 6 Plus Case Says:

    The m9 has a home screen widget that is supposed to recommend applications based on users' location, displaying the ones they are most likely to use at home, at work or when they are out and about. I found the recommendations unhelpful, because they didn't really reflect my actual usage.

  7. Hilbert Grab Says:

    The ways to make money were developed by our writers who provide the best essay writing service among all. They figured out the formula of success for a businessman.