Wednesday, December 10, 2014

Cam Hui on yesterday's US market action

Cam Hui
- why yesterday's action was like the October bottom. He goes through his thought process for why he doesn't think there's much more downward motion in store for the US market. It's worth linking to because he also mocks Mister Panty Piddles himself, Josh Brown.

Personally, when I saw banks and R2K stage a big reversal yesterday, I decided to put my cash back into those two sectors of the US economy. There must be a rotation, and those must be the targets. Hey, Cramer says put your money in IWMs to exploit the low oil price, I'd think we should expect a hedgie rotation into IWM for its December seasonality, and banks went up like crazy during the 1995-or-so-can't-be-arsed-to-look-it-up rate hike cycle.

We'll see. Cam Hui's fancy little patented trading model apparently hasn't given off a sell signal, and Steenbarger also doesn't think this is more than a mild rotation, and I'd think by now the robots have gotten re-tuned to avoid puking perfectly good stocks just because of a temporary dive in junk bonds, and I'm sure everyone in the market is selling in fear of another $VIX spike to 30 since it's right there staring at them on the chart, so maybe this is the time to buy.

So I sold half my BTO position (still got the rest of my juniors) and put money into some short VIX, and bought some and Now I'm nearly zero cash.

I still wouldn't be surprised by a bit of a back-off in gold and miners, though. The question, in that case, would be how long and how much. Then again, I think a lot of people are selling PMs and miners right now, and yet GLD and GDX aren't moving down: they're staying quite strong.

We'll see.

No comments:

Post a Comment