Update on Oil

Oil is being dismantled, day by day, pulling the classic face plant. On that note gasoline is down to $2.23 by me.  Lots of interesting moves happening under the surface, curious to see if there is contagion from this. 

Bullish & Bearish Explained

There are six general terms used to describe market direction. The market terms bullish and bearish were assigned to market conditions based on how each animal was known to attack. A bull attacks by thrusting its horns in an upward motion, while a bear attacks with a downward swiping motion of the paw. Being bullish on a stock, or in the market in general, means you think it will increase. Conversely, being bearish means you believe the market will decline.

If you are actually investing in the market, you can either buy a stock and have a long position hoping the market goes up, or you could sell stock and be short, profiting on the margin if the market goes down. The latter is called short selling and allows investors to be profitable in a down market. To short a stock, you borrow it from another market participant and sell it in the market place. If, after you’ve sold it, the stock goes down, you can buy it back at a cheaper price and return it to the market participant you borrowed it from, while profiting from the margin.

Shorting a stock involves the same process employed to buy most stocks, but in the reverse. It is considered more risky to short a stock because of the unlimited upside risk, as opposed buying a stock that can only fall to zero. Over time, it tends to pay to be long or bullish, given the market’s slight but natural upward drift as a result of pensions, mutual funds, and 401Ks that cannot be shorted. Just remember the old stock market adage, "buy low and sell high" or "short high and cover low." Try not to get caught up in the hype, when a lot of people are making money really fast it could be a herd mentality and high risk.

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IP(DOH)

After having some very impressive runs, these stocks are crashing and burning. Some ridiculous swings  in the early stages of the public life.

Food inflation

Look at this ridiculous parabolic move in Lean hogs. Anyone else notice there supermarket bills seem a lot more expensive last couple months?

3/14/14

Volatility products really picked up today, especially since the SPX was only down about 5 points. The Vix futures are in backwardation again.  I think were in the process of setting up for a nice correction but only time will tell. People have been conditioned to buy the dip for the last year.

The bulls have found the roids.

The Nasdaq Composite is only 15% away from its blow off top during the internet bubble of 99/2000. To put that in perspective of how long that might take, The Nasdaq has rallied 9% in the last 2 weeks.  Meaning the Nasdaq could make new all time highs next month at this rate………….

New highs.

84 stocks of the S&P 500 were making new 52 week highs today. I would like to believe that this huge rally in the last couple days is bogus but at this point its hard not to believe it. We've seen this play out multiple times in 2013,  a 3-6% correction and then a continuation of the march higher. Some points to think about. 17% of the SP500 made new 52 week highs. Recent news stories have been terrible such as Japans GDP number, record high spain bad debt, empire fed #, retail #, unemployment #,  Homebuilder #, terrible political situation in  Ukraine and Venezuela, Yellen said she would continue with the taper, but still the market makes new highs everyday. The market is shrugging it shoulders at everything and it shows with the vix back in the 13 handle. From a technical perspective the nasdaq has already made new highs, the S&P has resistance about 10 point higher from here around 1845 and the russell/Dow still look weak. Hopefully we will see some weakness in the coming days, it's a lot better trading environment with two sided markets and higher volatility.