Right... I trade technicals....
I have a bad case of the boogyman right now..... And Worse... I was smelling the Yips today.
I was stairing at charts on financials, and it seems like some of them look like they want to shake themselves out.... And yet the xlf looks to break the down trend, and... One would think they would be due for a couple good days...
it fits into the Quantifyable edges theme
Maybe my weak in the knees is a good thing.... I may need to stop reading blogs....
Thursday, August 21, 2008
running charts
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7 comments:
Since 7/15:
The SPY is being outperformed by the sector XLF, but both are being outperformed by the subsector KRE.
Granted they all look like they are rolling over, but the KRE doesn't look nearly as bad.
I'm not sure what this means, maybe the KRE has farther tho fall, but the narrative is that these regionals are making money with the low interest rates and stand to weather the storm better than the other two indices.
Value trap? Maybe. In which case, all financials should be jettisoned and we should prepare for the Mad Max scenario.
My gut says buy KRE and short emerging markets, but I can't say I have an exact thesis why this would work.
Good call on the XBI.
Interestingly, Teresa's list tonight (I just looked at it after my last comment), shows RKH and RF long with XLF and FXI short, which was exactly what I saw in the charts.
Also, home builders XHB roughly traces the regional bank index, which sort of makes sense, too.
If someone held a gun to my head and said "buy something", I guess I'd pull the trigger on a small regional bank or the index. And then I'd hedge it with EEV or FXP.
I'm just worried about mean reversion, The KRE is golden, long term.
When you look at some of the Big Financials, chart wise they are grim, especialy if the spy drops another 50%.
It Feels to me like the xlf has retested, and is what is causing the index bounce. One would expect a "Big Bounce" out of it, at least A buck out of the xlf. And this should rally the indexes, like crazy... but spx should still underperform.
When I look at some of the Lagards in the indexes, they feel like they want to "Break support", if they do, and all the other financials "Retest again".... That is what has me going.....
Ahah... the regionals are building a base.
You realize I got XBI from Invivo right, when she talks about High momentum, she is talking about developing shorts.
This big rally, fits into a solid "Buy the dip" in the QQQ and the consumer names.... even though, that may have already happened.
I think the week has gone on too long and I'm fatigued.
The regionals have a buisness model, and with securitization out of the market. If you don't get a loan from your local bank, you aren't getting one.... If you qualify. They didn't get as much upside in the big bubble, so not as much downside.... Except that boogyman "some big bank will fail". but we havn't had a bank falure in 2 weeks. So we are still on track for less than 20 bank failures this year.
SCC ultrashort Consumer disc..... It's nice and liquid.
I watch RF all the time, but it's just at it's support, it and some of the others worry me, Seems like they need a "Bear trap" washout.... or they are going lower.
I missed this in your original post "Value trap? Maybe. In which case, all financials should be jettisoned and we should prepare for the Mad Max scenario."
That was funny. I was looking at the XLE and it look like anyone loading in is chasing momentum,and going to get burned.
You said..."but spx should still underperform..."
Did you mean SPY or SPX?
I didn't see XBI on any of Teresa's lists, so I'll give you the credit. But Teresa did have a few individual biotech names.
SCC looks like a short retail fund. Before when you said short consumer non-discretionary, I thought you were talking more like SZK-- which is not as liquid.
spy and spx are the same thing roughly.
SCC still only trades maybe 20K shares.. but it trades some, as opposed to the ultrashort healthcare that trades 2K in a day.
I think it's a good move on the decline, and the Ultra short technology.
I keep hoping you will go to the Invivo chat. I could set it up in one of my spreadsheets
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