It's Too Late To Short

It's simply too late to short.  With SP500 down 11%, QQQ -13%, IWM -15%, since their 12/30/2015 high, it is simply too late.  If you believe that this will be 2008 all over again, chances are high that you might get an opportunity to short at better prices.  As you can see in the chart below, 2008 started with a 14% decline that was followed by a 10% dead cat bounce that led to some sideways action.

The largest rallies have happened in bear/corrective markets that are below the 200-day moving average as you can see below:

Be patient, you will get your chance.

Frank Zorrilla, Registered Advisor In New York

If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.

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This Chart Is Stretched To The Limit

2008 Redux

Market In Turmoil

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This Chart Is Stretched To The Limit

The selling so far this year has been non-stop.  Every breadth measure you look at is extremely oversold. The rubber band is stretched in the short-term, over the coming months and quarters, this could very well be the beginning of something bigger.  Make sure you have a plan.

One of the most interesting breadth charts I just came across is the one that shows the percentage of stocks above their 20-day moving average.  That number stands at 5% right now. Since 2002, we have never closed anywhere close to this range on a monthly basis, which includes 2008-2009 debacle, 2010 flash crash, 2011 Greece worries, and last year’s summer hit.

Frank Zorrilla, Registered Advisor In New York

If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463.

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2008 Redux?

The futures are tanking today again, the start of this year has been dismal.

Many know that losses are inevitable, but a majority don't accept it and act like it's not supposed to happen.  You can't avoid losses.

This small correction feels more brutal than any that we've had over the last couple of years, many think that this 2008 all over again. Maybe, it's a possibility, whatever.  The chart below shows how 2008 played out--in case you forgot.

Live to fight another day.  All you have to find motivation for the future is look at what the market typically does after big corrections.

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Market In Turmoil

Straight down is what the market has done so far this year.  The Nasdaq is down 9 out 10 days, -11% in a straight line, Small caps -12%, and -16% from the December highs.

It’s all about survival here, survive until things settle down.  They always do.

I’m big in communicating, especially during emotional, volatile times.

If you want a second opinion, suggestions, feedback, etc. Call me 646-480-7463, Skype me: zorzor45. 

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A Dead Cat Bounce As Expected

We are starting the morning with the futures up 150 points; some mean reversion is kicking in.  After eight down days in a row for the Nasdaq, a complete meltdown in the Russell 2000, a bounce is to be expected and it's natural.  This dead cat bounce by no means says that we are out the woods, but even in the worse markets, the market will go up AND down not up or down.

RUN, MKTX, SJM, APIC, are some of the stocks that I will be watching for long trades today, depending how we settle down after the open.

You can also rest assure that people will gravitate to some of (ex)-leaders that have been beaten up, like FB, AMZN, GOOGL, PANW.

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All Eyes On The Futures Tonight

There's no doubt that tonight will be one of the most anticipated futures openings in a while.  The terrible start of the year has a lot of people anxious and nervous that this might be the beginning of something big like 2008.  Many either forget or disregard that the average intra-year decline since 2009 is roughly -15%, we are at -7% now, this falls within the norm so far.  Not every correction leads to one of the worse years in history. However, people love the doom and gloom.

The best case for those playing a bounce is a 2.5%-3% gap down on the SP500 that would take the SP500 to the August/September lows.  If that level holds coupled with how stretched and oversold we are, we can get a decent dead cat bounce.

For those who believe that this will be a negative year for the market, I think a level to watch on the SP500 will be the 1500 level.  Back in 2013, the SP500 broke a double top pattern; the first top was in 2000, which was retested in 2008 and finally gave way in 2013, that's about 20% away from these levels.  By no means is this a prediction, just a simple thought.

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