Its been quite some time. I chose not to blog for a while. The summer irritated me with the news cycle never changing and recovering from a bad trade. However, like the gentlemen I am I got my hands dirty shut the door on the bad trade and jumped into momentum names. Instead of trying to hit a mega grand slam I am hitting doubles and singles racking up positive points. It is a good story and will be the next post I have in the works on how to manage a losing trade.
As I said here all the time, taper talk was a lie. If you listened to talk out of the Fed you were not surprised, if you listened to the media you were. Going into that decision the theme I had was #BTFD. Buy The Fucking Dip. Trading strategies deployed were all of the momentum variety because that’s the strength under the hood of this market. If anyone else tells you different they are full of it. This cannot be denied the charts they do not lie.
The financial media loves panic and fear. They scare you with the rips the momentum names have had and go on and on about the hurdles this market has. It was tapering of QE and now the government shutdown debt ceiling debacle. Again, my thesis as long as there is QE stocks go higher. It has been the tested plan. BTFD and you will win. As crazy as some of these gold bug wannabe businessmen in the House want to “restore order” test default, there will not be one. They are as stupid as stupid can get but the others clowns around are not that dumb and wont let such a shit show happen. I buy that weakness.
If you look in the chart below, you can see at the end of September there is a gap-fill which show strong buying. That is bullish activity because following the gap fill the SPY moves to new highs. However through the rising wedge drawn out on the chart you can see how many people keep missing opportunity on the dips. With every move higher you then see the effect of overhead supply. People who got in and the market sells off. They care catching sell offs and selling rips when they get back to even. So you have to be aware of that pattern. A deal out from those degenerate clowns down in DC could really send this market higher.
Raise a glass to Benjamin Bernanke