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I mentioned the "Crash is dead ahead" article a day or two go as evidence that the bottom, for the immediate moment, was in. I find it amusing that today's MarketWatch home page still has it as the top article contemporaneous with reports of the blowaway bull rally we had today. It just goes to show you – – – whatever is in the mass media, fade it.
Let me start by saying how pleased I am that my conjecture yesterday about the market's near-term direction has been correct so far. As a reminder, here was my prediction (drawn in green)…….
…..and here's what we've seen since then………………
Ahem. Pretty stunning, huh? How did I do it? With the KnightVision system, which I'm selling immediately for the low, low price of $49 per day! Operators are standing by! 1-800-TIM-RULZ
No, that's not it. My method was simple enough. I look at 5,000 charts every stinking week. I've been doing this for twenty years. Look at enough charts, and you get good at it after a while. I have looked at literally hundreds of thousands (God help me…………) of charts in my trading lifetime. So my brain is full of this crap.
Now, listen, I've made plenty of "bold predictions" which were worth less than Lloyd Blankfein's good name. I declared in October, I think it was, that the S&P had topped out. Errr – -that wasn't the case. So as I'm standing here beating my chest about my oh-so-brilliant prediction, I do so with the knowledge that I've had lots of lame-o attempts at divining the market's next moves in the past.
The difference this time is that I was really, really confident of what was going to happen, just like I was back in mid-January when I stared at my 30" Apple monitor and felt a glow of assurance about what was coming next. It is truly gratifying to see things pan out so far. If the entire pattern completes, you'll have to forgive me if I put these charts up at least a few dozen more times in order to cluck about it.
There was a bit more to it, though. I mentioned getting a completely snarky email last week – – on the 23rd – – which, by the way, marked the exact day of the highest close on the Dow. On top of that – – and this actually had much more weight – – a stunning number of Slopers yesterday seemed to finally throw in the bear towel. I don't think I'd ever seen so many people saying – in their own words – "I give up. I'm sick of losing money. I'm joining the bull camp and am just going to buy all the dips."
They didn't say it to be funny or sarcastic; they were serious. And when Slopers………..the bears' bears ………surrender, well, things are bound to get interesting. So I was shorting like crazy during yesterday's ridiculous rally.
I have survived the past seven months by being very "light", committing only 30% to 50% of my cash to positions, and by avoiding options and leverage. It's been a losing stretch of time, but only a single digit percentage loss, and something from which I feel I can handily recover. No one likes a loss, but in the face of a 25% explosion on the Russell 2000 over the past seven months, I actually feel OK about it.
My point is that I am finally comfortable being 100% committed. Further, if things continue to break my way, I am comfortable pushing into leveraged territory. As a trader, I strive to lose money slowly and make money quickly. I have excelled at losing money (!) slowly over these months, but I believe things are setting us for some serious money-making. At least that's what I hope!
Anyway, it's been a good week, and I'm going to rest. I'm still stuck in France time, and getting up at 3:30 each morning is getting kind of old. Hopefully this weekend I can shake off this jet lag and resume a more human schedule. Have a good weekend.
I swung by Palo Alto's Apple store this morning before it opened, and there was a line of about a hundred people waiting to get in, similar to the iPhone introduction I made a video about three years ago. The funny thing is that there is a constant stream of passerby taking photos – – with their iPhone – – of people waiting to buy an iPad. We have truly come full circle.
If you believe mass media is a contrary indicator, it's time to take profits in AAPL.
I want to humbly thank everyone who participated in my poll this weekend. I am so, so grateful to this community. I have an adoration of Slopers that is borderline embarrassing, and the fact I know there is a group of sharp, inventive, and understanding people to whom I can occasionally turn as a resource is a source of profound comfort. Thank you so much.
Since I've been so much wrenching soul-baring lately, I thought I'd turn the dial a bit and just do a quick, fun post. I watched the Oscars last night, and I really enjoyed them. I've always been a big movie fan, although the kinds of movies to which I am drawn don't tend to be the most popular. I tend to like movies that leave me feeling changed, even in a small way, when I leave the theater. I don't want to be entertained; I want to be altered.
In spite of that, I had a passing acquaintance with most of the nominees. Here are a few thoughts on last night:
+ I am grateful to Alec Baldwin who is living proof that, no matter how handsome you are, the curse of the middle age spare tire leaves almost no man untouched.
+ Jeff Bridges' capturing of the Best Actor award is marvelous. I didn't see his movie, but – first off – The Dude Abides. Second, he's a family man, and as a traditional and sentimental sap, that appeals to me. He's been married 33 years and is a dad to three daughters.
+ Although, at the same time, it was kind of a cruel irony that at the moment they mentioned his successful marriage, Robin Williams (divorced twice) was sitting right behind him. You can kind of see Robin Williams wince and bow his head when the thirty-three years is cited. Ouch.
+ I think it's marvelous that Kathryn Bigelow won for Best Director, but for Pete's sake, did they really have to play Helen Reddy's "I Am Woman" as she walked off the stage, just because she's the first female director to be so honored? Give me a break! If Hollywood wants to pat itself on the back for being feminist, then don't make a big stink about the fact she's a female! She's a director! Hypocrites.
+ You probably saw the bit where the celebrities were singing the praises, one by one, of each nominee for best actor and best actress. The most awkward one was when Oprah was assuring Gabourey Sidibe of the many, many wonderful roles that were waiting her in movies to come. Look, I don't mean to be cruel about this at all, but this actress is very, very large. That's perfect for Precious. It doesn't work so well when they're trying to figure out the cast for most new movies.
+ I guess Jim Cameron was surprised to receive neither Best Director nor Best Picture, but at least most of the technical categories were grabbed by Avatar. It's nice to see the nerds win.
+ I am *so* going to watch Logorama now. I never had even heard of it before.
+ When country singer Ryan Bingham was on the screen, my very young daughter immediately got interested and said, "He's cool. I like him." Uh-oh. Men with beards and ponytails might not work for Dad, sweetie.
+ So when did they drop the politically correct, "And the Oscar goes to…….." and revert to the crueler and more honest "The winner is……..". I guess at least they don't say "The losers are…...." and name off all the nominees with one exception.
+ Anna Kendrick is really, really cute. Really.
+ I thought it was awfully cool that Christopher Plummer played Tolstoy and also has General Chang from Star Trek VI on his resume. I pointed this important fact out to my beloved son.
+ Since people seem to be required to say the full, official name of the movie, it was pretty brilliant of the makers of Precious to name the film "Precious: Based on the Novel 'Push' by Sapphire", since they had to say all twelve syllables every stinking time they mentioned it. If I make a movie, I'll be sure to call it something like "Slope of Hope – The Greatest Film Every Made in Human History", just so the presenters have to cite the whole thing.
OK, that's enough.
