A Good Short Set-Up At HandIs It 2008 All Over AgainTaking The Elevator UpMy opinion is subject to change as new information comes in.Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.Work With MeStay Informed
"They take the stairs up and the elevator down" is an old Wall Street saying that has been around for ages. It was always followed by; "what takes you two years to make you'll lose in three months." For a long time, the market always went down faster than it went up, this is no longer the case. They are taking them up just as quickly as they take them down. V-rallies are now a thing.I'm not a fan of selling in the hole or chasing a frenzy. Sentiment has shifted from oversold can remain oversold to overbought can remain [...]
It seems like a lot of people are eager to short the market right now. The two main reasons are; the market has run up too much in the short term and the fact that we are very close to some possible significant overhead resistance.If you look at the McClellan Oscillator, which closed at +206 last night, might suggest that we are due for a pullback. Rallies tend to slow down once we get to the +200 level.You don't have to be a chartist to see the possible overhead resistance.Tomorrow the Non-Farm Payroll numbers will be released at 8:30 am, as you [...]
Is it 2008 all over again and why is the market crashing were the two question I was asked the most between the end of January and the beginning of February. Real-time to the second information has been and will continue to be a huge distraction for investors. Tuning out the noise has never been more important. Despite the fact that the average intra-year decline since 1980 for the SP500 is roughly -15% people were freaking out when we were down -8%. And they acted on it. We saw a massive amount of put buying by small investors, similar to [...]
The most widely accepted and general definition of a bull market is if it's trading above the 10-month moving average (200-day ma). If below then it is considered a bear market. Currently, the SP500 has closed two consecutive months below its 10-month moving average, and unless it can gain +5% in the next five trading days, this will be the third monthly close below it. The more monthly closes below the 10-month moving average, the more likely that the SP500 will retest its 2000-2008 breakout at around 1550 (green line) that would put the SP500 down 24% for the year. The [...]
The SP500 has had a decent bounce over the last four days, +6% to be exact. It was only last week when there was panic and despair in the air; you were able to see it in the parabolic move that the Gold and the Gold miners had. My phone didn't stop ringing from people who realized that when the tide went out, they were swimming naked and now wanted a plan. If you believe that we are in for a rough year, then the market has given you the opportunity to sell at better prices.As we approach some resistance [...]
History Of CrashesRead This Before You ShortFrank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.Work With MeStay Informed
"The higher the VIX, the higher the clicks"--Phil Pearlman. Nowadays you will never get more hits on a blog post than when you write one about crashes. Fear sells; if you can get a once in a lifetime crash call correct you will be immortalized for years regardless if you get everything wrong afterward. Remember, Elaine Garzarelli, Marc Faber, Nouriel Roubini, Meridith Whitney, Hussman, Peter Schiff, etc.Here are a few things to remember;The market goes up and down not up or down.Corrections and outright bear markets are painful.Big money is made after corrections, the bigger the better, live to fight [...]
So here you are, champing at the bit to short because your favorite blogger who has been bearish since 2011 has been on fire this year. You see the DOW down 300 points, and you are completely convinced that this 2008 all over again. Well, shorting is just not the opposite of going long, the dynamics are entirely different, and the last thing you want to do is short in the hole or short an oversold market (presently I don't think we are oversold).Here is one significant fact about shorting in bear markets:The biggest rallies happen in corrective/bear markets, exactly [...]
In the last two weeks, the sellers and buyers have found an equilibrium, neither has been able to do anything without any conviction. Dips to $187 on the SPY are being bought, and rallies to $192 are being sold. Currently, the IWM is holding up slightly better than the Nasdaq Composite and the Nasdaq 100.$FB $GOOGL $MSFT $AMZN are some of the Nasdaq 100 names of interest for me if they can turn green on the day. $CREE on any pullback that does not break yesterday's low is also a stock of interest, $SXCP, $WING $GLBL round out the list [...]
