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Sunday, February 25, 2007

Still no Sell Signal

The end of last week refused to give the sell signal, so it is still a long side market. I am relieved simply because it would have had to have been ignored due to the seasonal up bias still in place. If we get one in March it will be past the filters for time of the year.

We may not get a sell signal, so there is no reason to be short until one develops. We have had a tremendous run, and the trend is up, so ignore the gloom and doom of the doubting Thomas types and stay with longs until we get something that says not to. There are some internal aspects that have weakened slightly, as you can see the commercials are mostly on the short side. As a result the base underneath is not as strong as it has been for the last several months.

All this really means to me is to not add too agressively to existing longs at this juncture. It does not mean run out of the market and hide.

4 comments:

graphrix said...

So what did happen today? I am very curious to hear your opinion.

Also when do think the paper money CDO ABX losses will start to hurt the lenders? IMH just seemed to blow it off as blah it's just paper money and it has only gotten worse for the ABX since they reported.

If you haven't already checked out:

http://forums.irvinehousingblog.com

You might want to stop by and check out the black tuesday topic. They could use a less emotional opinion. Most of the people you will recognize from Lansner's blog. Don't you just love how the pigs ignore you on there when you ask direct questions?

IrvineRenter said...

I don't know about you, but I interpreted today's action (2-27) as a sign to go short.

Chris Johnston said...

I will post a new topic regarding todays action for tommorrow, it was quite a day.

There are so many cross currents going on right now that it is hard to determine when something will have a strong effect. I certainly can envision a scenario where the sub prime meltdown does not kill the prime market. However, I can also visualize one where it does.

People that think the worst is over are either being dishonest, or are not looking at what is happening. Even though I am buying a property right now, I still expect it's value to decline over the next couple of years.

I will check out that blog, but I do agree with you. Every time I have asked a direct question, it is nothing but crickets in Lansners blog. Most bulls in there with a few exceptions are frauds and have no money or no property IMO.

I offered last year to put up 100k and get 9 others to do the same. I offered to buy a home for 1M and let the bulls keep 100% of the gain, and eat 100% of the loss when it was sold in a year. I did not get one single reply to it, even when I posted it multiple times.

That said it all for me.

Chris Johnston said...

Irvine renter

My most recent post most closes summarizes my view on this. I never chase huge momentum moves like this, so I would never initiate any new shorts a day after something like this. If I were short from yesterdays open, I would stay with it, trailing a stop.

I have all buy signals today, so we will see which if any get triggerred. We are really oversold short term right at the moment and typically big days like that are not followed by another one the next day.