Stock Market Top

[stockjockey]

I just finished loading the largest short position ever in my life. Today while the S&P 500 hit the 2030's I took my entire brokerage account and bought SPXU which is an ETF that goes up in price 3x as the S&P 500 declines. I know I've been wrong twice on the start of the next bear market, but feel ultra confident the new Bear has started. Here's why:

-cape (cyclically adjusted price to earnings ratio) touched 27 recently. It has only crossed 25 three other times in history. 1929, 2000, and 2007. Stock market crashes of epic proportions followed. Although the cape crossed 25 over a year ago and it has been frustrating as an investor to get burnt and having to cover my short positions, my next point is all that matters.

-The Fed has officially stopped QE operations which they have been conducting through numerous programs and versions since 2009 since this bull market began. With the Fed out of the way citing a strong economy and a 5.8% unemployment report, the Fed cannot reinstate QE for awhile as this would discredit their efforts. More importantly the ECB and Mario Draghi sat on their hands Thursday morning with no policy action. Therefore with the Fed and the ECB out of monetary injections, this market has no juice and stocks will fall imminently.

I post this as an awareness to my fellow madjackers. Please make your own investment decisions.

GL! Fade, Follow, or Pass

 

[JMAC]

Hello
Sent you a message about investment question.

Thanks

JMAC

 

[stockjockey]

So with the ECB and PBOC double barrel announcements this morning, there's no way stocks have topped. This on top of the Bank of Japan's massive QE announcement a couple weeks ago has collectively made me realize that where the Fed exited, the rest of the world's largest central banks will rig the game to keep the party going. Ultimately, this all ends badly but today's actions buys them more time. With that said, the market on a short term basis is grossly overbought so keeping the short for now. After we get a small pullback, I will reluctantly join the party by going long.

 

[Jaxx]

So with the ECB and PBOC double barrel announcements this morning, there's no way stocks have topped. This on top of the Bank of Japan's massive QE announcement a couple weeks ago has collectively made me realize that where the Fed exited, the rest of the world's largest central banks will rig the game to keep the party going. Ultimately, this all ends badly but today's actions buys them more time. With that said, the market on a short term basis is grossly overbought so keeping the short for now. After we get a small pullback, I will reluctantly join the party by going long.

With this epic slide in petroluem and Europe concerns does this change your thinking about going long? Small pullback in play.

 

[stockjockey]

With this epic slide in petroluem and Europe concerns does this change your thinking about going long? Small pullback in play.

Still short and now nicely profitable. My models are still bearish and it's possible that the 3 ring circus a few weeks back might not have worked. Right now I'm showing a small Santa Claus rally back to 2000-2010 on S&P and then another steep slide similar to the one we just had going into the New Year.. No reason to exit short position yet. Of course central bank intrusions can hamper forecasts at any moment. Fed meeting Wednesday.

 

[stockjockey]

S&P goes from 1980 on Tuesday to 2060 on Thursdays Fed fueled rally. I must be nuts, I'm still short:scared

 

[stockjockey]

Reached the threshold for this trade. Had to wave the white flag. -7.3%. Markets aren't allowed to correct or crash. Thanks Janet and global central banks. When this thing snaps I think it will be so fast and furious no one will see it coming. Like an '87 crash -23% in one day type deal.

 

[stockjockey]

Actually correction on the final tally of my short was -7.3%. 50 S&P points above the 2030 level when I entered was a mental stop loss for me. I expected a Santa rally, but 100 S&P points in 4 trading sessions defeats you emotionally. I sit in cash and regrouping for my next move. Not ruling out another short re entry soon.

 

[MadJack]

Reached the threshold for this trade. Had to wave the white flag. -7.3%. Markets aren't allowed to correct or crash. Thanks Janet and global central banks. When this thing snaps I think it will be so fast and furious no one will see it coming. Like an '87 crash -23% in one day type deal.

Looks like you bailed too soon and I missed jumping in myself. Been waiting for this down move for a long time and haven't been paying any attention. :facepalm:

What's the plan? Get in short now or wait for the next bullshit rally to top off?

 

[stockjockey]

Looks like you bailed too soon and I missed jumping in myself. Been waiting for this down move for a long time and haven't been paying any attention. :facepalm:

What's the plan? Get in short now or wait for the next bullshit rally to top off?

While I expect more immediate downside to 1920-1940 on S&P 500, the ECB and Draghi are expected to announce QE next Thursday. That should put a floor under this dip and rally stocks to a retest of all time highs or pretty close by early-mid February. This is my launch point for another short position. Another factor is how large will the ECB QE be? They are going to need more than 500B euro to keep the party going. Any way you look at it, we're ultimately getting closer and closer to the point where central banks can't stop it.

 

[stockjockey]

And it goes without saying, I will be getting long late this week or early next week to ride the bullshit rally😄

 

[redsfann]

A small pullback from all time highs today.....
Still thinking a major correction is coming?

 

[stockjockey]

My work shows 5-8% move down starting mid March into early April. Retest of recent high of 2120 in April. My guess we hit 2135-2150 sometime in April. Crash launch point from here.

 

[Jord20]

Stock, are we buying any UVXY yet?

Man, a nice long vol play has to be coming soon. I dipped in late today

 

[stockjockey]

Haven't checked this thread in awhile, so sorry for late response Jord. There has been numerous central bank interventions this year that have made it very difficult. So many in fact the crash launch point has been pushed back to fall in my opinion.

 

[stockjockey]

With that said, I think my forecast was pretty much right on in terms of price as we hit 2133 intraday during today's session. We have Already Topped or are nearing a Top short term. The potential upside is 2150 from here with downside risk to 2020. My advice raise cash now or enter a short position.

Looking out the upcoming dip will be a buying opportunity as I think we hit 2175-2200 by July/August. FWIW just one mans opinion.