{"id":1365,"date":"2010-03-22T05:30:26","date_gmt":"2010-03-22T09:30:26","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=1365"},"modified":"2010-03-20T13:17:04","modified_gmt":"2010-03-20T17:17:04","slug":"some-lazy-thoughts","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/03\/22\/some-lazy-thoughts\/","title":{"rendered":"Some Lazy Thoughts for a Complacent Market"},"content":{"rendered":"

Ever since moving this site to a more standard blog format last September, I have been able to write more articles, more consistently. In that time, I hope I have delivered some value to those listening out there in the blogosphere.<\/p>\n

Now, it is time for a partial hiatus as I attend to personal and professional business over the next two weeks or so.<\/p>\n

I leave you for now with my current “lazy” thoughts on where we stand in this complacent market:<\/p>\n

    \n
  1. The dollar’s two day spurt back toward the top of its six-week range was impressive. This action demonstrates that the 50-day moving average (DMA) will provide strong support for the dollar as expected<\/a>. However, I still expect the June highs to hold as resistance. If that resistance manages to melt away, the dollar will likely go on another extended run. On-going uncertainty regarding the path to resolution for Greece’s debt problems<\/a> remains the main near-term catalyst for the dollar. Without it, the dollar resumes its longer-term decline given the Federal Reserve’s persistent dovish monetary policy stance<\/a>. At best, I am expecting an extended trading range.<\/li>\n
  2. The stock market remains extremely over-bought. The percentage of stocks trading above their 40DMAs (T2108<\/a>) sits at a lofty 82%. While the steady climb day-after-day appears comforting, it is also seductive. I have duly noted the amazing heights of complacency exuding from the bulls who now expect the S&P 500 to climb to 1250 in short order. Perhaps this is not surprising given everything the market has overcome in the past year to now sit at 17-month highs. However, I stick by the rule that low-volume buying begets high-volume selling; weeks of gains can be erased within a manner of days once sellers finally get motivated. Thus, this is not the point for establishing new longs. If a trader insists on buying into this move, use patience and\/or buy “catch-up” stocks. “Catch-up” stocks have lagged the current market move, and they become more and more popular as a “cheap” way to participate in a rally for those who feel the train has left the station without them.<\/li>\n
  3. Traders trying to short this market need to focus on particularly weak stocks with poor news flow and\/or stocks that have clearly failed at strong resistance levels. Otherwise, shorts will require substantial cushions. While I am pretty confident the selling will come, there is no telling when it will start given the current up-trend and stubbornly persistent over-bought levels.<\/li>\n
  4. The good thing about this complacent period is that volatility remains low and puts are relatively cheap.<\/li>\n
  5. The first quarter ends soon. Look out for performance chasing.<\/li>\n
  6. Another earnings season approaches. The last two earnings seasons have precipitated substantial selling, strong enough to suggest near-term tops had occurred in the market. Given the market has recovered both times, I am expecting a milder reaction to earnings in April…absent some significantly negative news of course.<\/li>\n<\/ol>\n

    As always, be careful out there!<\/p>\n","protected":false},"excerpt":{"rendered":"

    Ever since moving this site to a more standard blog format last September, I have been able to write more articles, more consistently. In that time, I hope I have delivered some value to those listening out there in the blogosphere. Now, it is time for a partial hiatus as I attend to personal and … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[135],"tags":[65,67,157,178],"class_list":["post-1365","post","type-post","status-publish","format-standard","hentry","category-stock-market-trading","tag-sp-500","tag-stock-market","tag-trading-volume","tag-volatility"],"yoast_head":"\nSome Lazy Thoughts for a Complacent Market - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/03\/22\/some-lazy-thoughts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Some Lazy Thoughts for a Complacent Market - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"Ever since moving this site to a more standard blog format last September, I have been able to write more articles, more consistently. 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