Bill Cara’s Blog for Feb 15, 2012
CTA Trading Desk Morning Report
[8:00am ET] Good morning, Geoff here.
This is part of what I wrote last Thursday, Feb 9th:
“With that said; everything is stretched. A quick glance at the charts leads me to think that the dollar should rally while stocks should fall. Barring central bank intervention, that would be the way to position a portfolio right now – at least not buying stocks at these lofty levels. However, we have seen that when central banks are involved, “stretched” can turn into “ridiculously stretched”. This is a time to be patient, watch prices and trade accordingly.”
Well, the dollar DID rally for the last 3 days. However, stocks held up very well when they should have sold off. What that tells us is that when the market “should” sell-off, but doesn’t, that central bank liquidity is trumping all technical and sentiment indicators. I have been writing about the possibility of a run-away market for a few weeks now and that thought stemmed from what happened during past periods of QE. We are now in a global liquidity pump and it is quite possible that the market runs to new highs and becomes “stupid”, running like Forrest Gump.
As I have mentioned, our basic strategy in stocks has been to have sell stops in place for current holdings should the market sell off AND have buy stops in place should the market move to new highs. It will be interesting to see if our buy stops get filled today because we are over-weight stocks in All-Weather. Our Growth strategy has a normal long stance. So; any new buys will raise our risk level and that will have to be monitored closely.
As Forrest Gump’s mom said; “stupid is as stupid does”. Let’s make some money!
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||37.22 (1.71%)||Components, Chart, More|
||9.77 (0.44%)||Components, Chart, More|
||32.08 (0.95%)||Components, Chart, More|
||84.22 (1.25%)||Components, Chart, More|
||2.73 (0.85%)||Components, Chart, More|
|^OSEAX||OSE All Share||475.28
||4.23 (0.90%)||Components, Chart, More|
||3.86 (1.15%)||Components, Chart, More|
||33.43 (0.54%)||Components, Chart, More|
||18.74 (0.32%)||Components, Chart, More|
||9.00 (0.90%)||Chart, More|
||11.06 (1.23%)||Components, Chart, More|
||19.85 (1.28%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||800.86
||17.24 (2.11%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad’s Catch of the Day
Kaimu’s Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report