Retail Investors Are In – You Buying Or Selling?

Well, if you’d been wondering at all if/when the last of the retail investors where going to indeed “pile into markets” – look no further than these last few days.

Twitter as a fantastic example making like 40% gains in the past 10 days alone, a company still yet to turn a profit. Without fail the “Santa Claus Rally” has exceeded all expectations, on the back of a market already stretched to the upper limits of reality, while currency markets sit firmly with their wheels in the mud.

Once again (as so many times in the past) here we sit with very little to trade, at a time and place where making any “major decisions” makes little sense at all.

It makes no sense at all putting money at risk in a low volume environment, where “churn” and “grind” are about all you’ve got to look forward too. The year will wind down here over the next few days, and with the start of a new year we can expect the fireworks to pick back up.

Remember – The Fed “announced tapering to start”, but that said tapering “starts” in January.

Retail investors are now in. What does that make you?


25 Responses

  1. robert December 26, 2013 / 2:24 pm

    Unbelievable.. the rise n rise in the equity mkts… how is this possible? Algos refusing to let it fall…never seen anything like this before..still hoping for the yen carry trade to unwind

    • Forex Kong December 26, 2013 / 2:30 pm

      Ya….its pushed further than I expected as well, but being year end, and with Bernanke’s term ending etc etc…it is what it is.

      Good ol Mother Market – she nearly always wins.

      Yen is unreal as well, but again…..we are in uncharted waters here with the QE’s etc, and can only “go with it best we can”.

      AUD/JPY looks like it’s ready to roll over but the EU pairs….EUR, GBP and CHF are unstoppable.

      • robert December 26, 2013 / 2:36 pm

        I dun think retailers are in at all..this is just pure algo on no vol..if retailers are in, they would have let it correct down already leaving the retailers tohold the bag. This upwards move is to try to get them to buy in but failed, thus they csnt do anytthing ut push it up?

        • Forex Kong December 26, 2013 / 2:46 pm

          So we’ll see.

          I know a couple people have recently contacted me / guys I know with very little market experience asking if “now’s the time” etc so…..

          You’ve got it that the algo’s are werkin hard, and I think Dec was one of the largest Fed QE months on record ( dont quote me I haven’t gone /look it up / confirmed that ) so……ya man we’ll need to see what the new year brings.

          One thing for sure though, the next dip / correction will certainly be bought by retail.

  2. robert December 26, 2013 / 2:54 pm

    I dont think QE has that much of an effect anymore..the equity mkts see to follow more on the yen pairs like eurjpy n usdjpy? Like you said the japanese qe is much larger than the US ones. Guess we have to watch nikkei as you posted previous. It has broke out of 16k, but is it a headfake?

    • Forex Kong December 26, 2013 / 3:16 pm

      A level in Nikkei of 16,000 or 16,450 etc…gees – that thing fluxes 350 in a given session!

      Today’s low volume jump etc I dunno – looks bunk to me.

      16,000 even was the previous high on the huge spike when QE kicked in.

      16,000 is where price finally petered out the first time, and I don’t see improvements / fundies supporting higher but hey….I’ve been saying that for SP since 1770 and lower.

      • robert December 26, 2013 / 3:29 pm

        Well hard to fight the govt when they are the ones that want the retailers to carry the bag like in us and japan. It is too obvious. And people are congratulating ben on a job well done…goodness what crack are they smoking…

        • Forex Kong December 26, 2013 / 3:39 pm

          We see it for what it is…but aren’t making a pile o cash doing it!

          As Pete has just suggested, flipping long and just going with it….until of course you’re “not” going with it.

          It’s the same ol thing over n over as bulls n bears each take their shots where they feel most comfortable.

          Me…….debating it on Dec 26th of 2013, after trading through one of the toughest years to date? What can really be said?

          Trade safe and don’t go loading any boats.

  3. Pete December 26, 2013 / 3:21 pm

    I’m a day trader and short swing trader.twtr has been awesome with options, Drys has been huge as a cheap stock buying lots of shares.Many others as well.all long. I gave up the mentality of shorting becauise the market is to high and joined the crowd and anything i go long wins!!! It has been too easy! Today I did want to do some long calls in FEB or March options as the VIX is too low. I wanted in at 11.70 but did not expect it to hit that today and walked away. If it goes there again that will be my first long to go short.

    • Forex Kong December 26, 2013 / 3:34 pm

      Yes it makes little sense pushing short in the face of markets that continue to rip higher.

      For me as a fundamental trader – it’a always a tough spot, when these things don’t line up but….as with yourself and your strategy – we all “eventually” find something that works for us.

      I do a litlle more “sitting out” than I’d prefer at times ( this being one of them ) but can only “go with what I know”.

      No reason at all not to keep trading on the long side ( with eyes wide open ) until proven otherwise.

      • pete December 26, 2013 / 3:46 pm

        Thanks Kong. Love your blog and love your trades and style. You are one of the few I consider worthy of reading!

        • Forex Kong December 26, 2013 / 4:06 pm

          Thanks Pete – this is what I like to hear!

          Although on days like today damn……hard to look “relevant” just sittin on the sidelines but….

          I’m rarely guilty of “over trading” so……go go go man, and fell free to get in here / post what you’re doing in options / equities land any time!

  4. Umar Bhatti (@charmtrader) December 26, 2013 / 6:42 pm

    This blog is becoming like zero hedge! Mostly bearish views which hardly materialised since the 2009 bull run. Maybe doom and gloom brings more viewership. The fact is a lot of people missed a great bull run just reading blogs like this! Another fact is Yen is going towards 114 after a small corrective phase.

    • Forex Kong December 26, 2013 / 6:50 pm

      Yes I’ve thought about it as well. Things are sounding rather “bear bias” here these days.

      Unfortunately in being a fundamental trader – it’s the only view I can go with for now as – I’d love to be writing about all the wonderful “growth stories” and all the “job creation” coming up everywhere……..damn thing is – there isn’t any.

      If “bullish” is “x” number of Fed induced points on an equities index while an entire economy slowly ( well not even so slowly ) “implodes” well then…..ya – you’ll have to look elsewhere for now.

      There will come a time when I’m all “gidy and positive” about things for sure….no question.

      It’s just not now.

    • Forex Kong December 26, 2013 / 6:59 pm

      I glanced over your post and responded rather quickly……now in reading it again – something glaring.

      “People missed out a great bull run reading blogs like this”? wait……..

      You mean that “people” ( and in this case I’ll assume no….actually “you” ) base your investment decisions on the rambling’s of a complete and total stranger bouncing around the Internet disguised as a gorilla?

      Oh my………..

  5. schmederling December 26, 2013 / 7:27 pm

    The DXY on it’s own looks very weak here – I have a 2hr fire on the verge of a Negative fire – I am still tracking the daily which should break first week of 2014 ringing in the NY – that shell be most interesting

    I will report back on the daily fire once it breaks – which will most likely be to the Neg side…..

    Cheers Schmed,

    • Forex Kong December 26, 2013 / 7:36 pm

      I’m looking for the next ( and likely last ) leg down.

      3 – 4 days flat as expected over the holidays….

      Both GBP and EUR looking good here vs USD as well Commods.

      I’ve put on a couple trades.

      • schmederling December 26, 2013 / 7:42 pm

        Dr. Kong – would you not expect a test of 72 in the DXY by or in & around Spring of 2014? from a mid-term perspective?

        Cheers Schmed,

        • Forex Kong December 26, 2013 / 8:04 pm

          You know the “can of worms” we open looking out / speculating that far out but…..

          (I should posts a chart with a bunch of squiggles on it etc…)

          I think USD is gonna take another leg lower here, and then rocket out of a significant “mid term type” bottoming, then continue making zigs n zags in a downward direction.

          When we pull a big ol longer term chart, we can see the area down around 72 – 75 being the “zone” – but when using a crayola the exact level of support could really be “anywhere around there” so……what can ya do?

          Getting this wrong is obviously the difference between one having an “inflationary view vs deflationary” and we know how that convo goes as well right?

          Applying what we already “know” as opposed to “what might be” I’ll keep with the inflationary view until something proves me wrong…and then simply change my view and carry on!

  6. schmederling December 26, 2013 / 8:27 pm

    got it loud & clear – LOL but thanks….

  7. schmederling December 26, 2013 / 8:29 pm

    but one’s would say we are due for a 3-year CYCLE low in the DXY in that TF….. that’s it for now LOL chat with you later..

    • Forex Kong December 26, 2013 / 8:56 pm

      I’d have to quickly brush up / review – but yes off the top of my head…cyclically speaking..

      3 year cycle low in USD on the horizon in coming months yes.

  8. schmederling December 26, 2013 / 9:25 pm

    DXY 2hr is rolling over – here…… I sight for sore eyes… next will be the 4hr squeeze to fire off….

  9. slimpickens December 26, 2013 / 10:01 pm

    Gary Savage doubling down: ( from today)

    Considering this is a low volume holiday week I don’t know how much significance we should attach to any moves, but so far I’m not seeing anything to suggest deviating from my expectation for the rally to continue and intensify into earnings season. About another 80 points on the Nasdaq will take us to that 4250 resistance level where I will enter half of my 2016 puts. I’ll save the other half just in case the market continues and double tops above 5000, although I doubt that kind of parabolic move is in the cards this late in the intermediate cycle.

  10. JSkogs December 26, 2013 / 11:14 pm

    yen march 14 contract daily chart – potential hammer time today. I realize holiday trading should be taken lightly. Looking forward to the beginning of this next week!

Leave a Reply