If I had to take a guess... I can't believe that I'm siding with Schiff #6 (If this market ramp continues)
Things that will never happen list:
8, 7, 5, 3, 2
Cubs prob. will will before Fed raises rates...
Not to mention SA authors are notorious and have ulterior motives. In this case, it is pretty straight forward.. he is long NIHD.
What was he going to write that would not sound BULLISH? Take over speculations should always be taken with a grain of salt... If they were so simple to spot then everybody would load up and be richhhhhhhhhhhhh...LOL
Instead, focus on 2 things that are real (Fundamentals and Technicals)
Fundamentally: NIHD still have several issues and nobody (including the company) know if they can stir this turn-around.
Technically: The chart looks a lot better today than it did yesterday, can that change tomorrow... Yes. Can it finally break the 50 DMA tomorrow... Unlikely without any supporting news.
This is the reason that the market came back today as people were holding for the Div. What would happen if the market falls more than the Div payout? I guess everybody is banking markets can only go up... Just like the tech. stocks in 2000, real estate in 2007 :)
191 is right... A month? Are you kidding me? Try a few days... People have become so wildly bullish that they have forgotten how a market falls hard & fast.
Can anybody quote of an instance where a buyout of a penny stock company has transpired? I'm not saying a buyout cannot happen... But, very unlikely at these levels. If they announce a covenant deal and better earnings and the stock fills the Feb-28th gap and moves over $2-$3, then it might be a more viable target (If they do have some real value)
A buyer is not looking the shares price... but the real value of the assets/business. of course the debt is almost 40 times the market cap. is the bigger issue.
Up 19% on a speculative article on SA???
Hopefully, more people did not get suckered in to this move... Anyways, nobody really knows how this will play out... but technically it did help the stock quite a bit and now trading above 5, 10, 20 DMA. 50 DMA is sitting @ 0.73 and looks like it want to challenge it...
Today could be the reversal Day... (Although people might hold SPY/QQQ for the dividend)
This week could be the outside reversal week..
Will have to wait and see... The setup is prime for a turn to the downside.
1) Potential H&S on the Russell (1180 level is the RS)
2) Potential double-top on the NASDAQ (Big M forming)
3) Dow & DJT did not set new highs today.
4) Don't see many more positive catalysts in the future, but a lot of headline risk (Iraq being the top one)
5) Bullish sentiment as high as it has been in recent years and extreme complacency (Put/Call ratio @ 0.38)
6) Vix at multi-year lows
Today could be the outside reversal Day...
This week could be the outside reversal week..
Still in play....
Yup... Hence I would like be short via puts when the market has that BIG drop. FED has made it impossible to time the market with their money printing and so I'm long puts in Sep/Oct... Enjoy while it lasts.. But, today's action is a lot like Sep-12 when QE infinity was announced.
The question is which FED chair will have the guts to pull the plug? Nobody wants to remembered as the person who crashed the markets...LOL. Even though they have just been following their predecessors :)
" The new obsession with every word out of the Fed is bizarre"
When the whole stock market is contingent up on the FEB printing free/cheap money... Every word that fed speaks is relevant, important and in fact is gospel :)
They lose time premium, but that will be compensated with the rise in volatility for longer dated options. I think you can be long volatility at these levels and then try to spread them out when VIX rises.
Buying inverse 2X/3X ETF is the second quickest way to lose your $$$$. Just use options to be short... Esp. when the VIX is at multi-year lows... I'm long Sep/Oct PUTS in QQQ/SPY
What bears? Other than a few stranded ones that did not get the MEMO all the others are either extinct or converted BULLS!!!
Although I acknowledge your point about no accurate models can be built to simulate the impact of such an extreme measure.... Common sense tells that a fix cannot be the same as the cause.
What did the free/cheap money policies by Green span lead to? A major real estate bubble followed by a massive global financial crisis that posed a systemic risk to almost every market. It is just more of the same... just bigger and longer. Hence the definition of insanity - Doing the same thing over and over again and expecting different results.
QE at the depths of financial crisis made sense just to stabilize the system and bring confidence back in the markets... but, beyond that QE only inflated this free money driven asset bubble. This is not a real recovery and will end badly (Much worse than 2000 or 2008)
It did nothing but widen the income inequality and at some point the flood gates will open. They should have let the market self-correct, instead of creating this artificial sham of a recovery.
Nobody has priced in the above case where FED announces stopping QE very soon... The FED mandate was Unemployment below 6.6% and Inflation below 2%... Well, Unemployment is @ 6.3% and Inflation crossed over to 2.1%... Also, FED has some new board members that might shed some light of what a mess they have created and is about time to close the shop.
If something like above were to happen, imagine the market plight where...
1) PUT/CALL ratio is at historical lows (No portfolio protection in place)
2) Market has been so over-bought by several metrics
3) No 10% correction in almost 3 years
4) No 1% move in either direction in 40+ days
5) Bullish sentiment at historical highs
Market has a way to hurt the most people with it's move and right now since everybody is long with 2-4 times on margin... guess what Mr.Market would like to do?
It pays to be a contrarian :)
Today was the test of the trend line that was broken on last Thursday and it looks like it failed and could not get back in the channel. Unless, FED announces QE-4 in the light of terrible GDP numbers the market is setup for quick and nasty fall.