“We’ve taken the market to areas that used to be considered extreme. The S&P is selling at a 25% premium to its 200-week moving average. That is very rarified air. You can look at the number of stocks that have reached new 52-week highs, they are at a 35-year high going back into the 1980s. So you see things that ordinarily people would say, ‘The air is far too rarified here.’ Yet because of the concept that ‘I must buy the dip,’ they really don’t get a chance to dip.”
– Art Cashin, Director of Floor Operations at UBS
Kita sudah berada di paruh kedua bulan Mei dan sekaligus paruh kedua kuartal April-Juni 2013 menjelang liburan musim panas. Bursa masih terus melonjak bahkan sebagian besar sudah mencapai target kenaikan yang seharusnya untuk akhir tahun.
Indeks Dow Jones, S&P 500, saham-saham kecil-menengah, transportasi dan lainnya beramai-ramai berlomba menembus rekor tertingginya. Atau dengan kata lain, sentimen bullish masih dominan di bursa.
Namun kenaikan ini merupakan kondisi melt-up market – dimana para investor melakukan aksi beli karena tidak ingin ketinggalan dalam kenaikan harga – sementara di sisi lain yang melakukan tekanan jual terpaksa melakukan short-covering (short squeeze), yang turut menjadi faktor pendorong harga naik lebih tinggi lagi.
Memang sebaiknya tidak melawan model bursa seperti ini, dan aksi beli nampaknya merupakan satu hal yang ada di benak para investor saat ini karena kenaikan belakangan ini dan sehingga akan memicu kelanjutan kenaikan yang lebih tinggi dari yang diduga.
Pertanyaannya adalah bagaimana kita memanfaatkan atau bertransaksi pada bursa yang sedang diliputi euforia? John C. Burford, editor dari MoneyWeek Trader, mencoba menjawabnya dalam sejumlah paragraf berikut:
“Today I will cover the US equity markets via the S&P 500 index, which has been making new all-time highs of late.
Euphoria is rampant in the stock market – there is no other word for it. Sentiment readings are almost off-the-scale bullish. Here is just one:
The Daily Sentiment Index is a poll of futures traders, and since the start of the year record highs have been continually made.
But note that back at the November low, only 8% of the market was bullish! Now, there are only 8% bears. That is extraordinary.
So, in the space of six months, traders have swung 180 degrees to the bull camp. You may ask… what causes a herd of traders to switch allegiance so suddenly?
A great question! And one that many have answers for – although most are plain wrong! My view is that traders follow the herd, albeit mostly unconsciously. Where the herd is heading, that’s where most follow. Waves of sentiment/mood sweep humanity. When people become more positive, they tend to buy stocks, and vice versa.
And when hedge fund managers see others buying, they are forced to follow suit, despite any reservations they have. Otherwise, they will be accused of not matching or beating their competitors. This fear is the motivation behind herding. Also, the US Fed has been vigorous in their support for the market, of course.
But there is another powerful factor at play in the current market – Tina.
There is no alternative – that is the prime justification for buying stocks in 2013. Let’s look at a few of those alternatives:
Bond yields are puny – even junk bonds are making new all-time highs, despite the risk – that is why they are called junk. Even sovereign bonds of such problem nations as Italy, Greece and Spain are being pushed up, supposedly from the waves of investment from Japan.
Gold does not have the allure it once did, and commodities are well off their highs and appear unattractive.
And once the darling of investors, emerging markets have declined off their highs.
So, US stock markets – and junk bonds, which act very much like equities – are almost the only major area which attracts investors. And since recent company earnings have been good, that has provided the justification for joining the herd.
But Tina is not an investment strategy – it is a frame of mind. If equities are the lesser of several evils, then they are still evil! And frames of mind can change overnight (see above chart).
One other point – some are calling this the start of a massive bull market with some forecasts calling for 25,000 in the Dow.
But one glance at the above chart should convince that we are much closer to a top than a bottom. All bottoms have started from low bullish readings, and all tops have been made on high bullishness. In fact, this has to be the case.
The power to create a bull market has to come first from the majority of traders/investors that have not yet bought into the market, then from the majority who are short, who need to cover as the market rallies.
This means that I am still looking for a top – a search which has been in vain, I admit. Who said that markets can remain irrational for longer than you can remain solvent? But maybe he hadn’t heard of stop losses…”
Saat kebanyakan orang mengejar kenaikan, saya justru lebih memilih untuk mencari aman. Dan inilah yang menjadi tema utama tulisan saya pekan ini, dengan berlandaskan teori dari sebuah organisasi yang memiliki dedikasi mempelajari efek psikologi massa pada peristiwa-peristiwa dunia.
Bagi Anda yang belum tahu Elliott Wave Theory (EWT), yang memiliki dasar dari gagasan bahwa perubahan psikologi massa merupakan pendorong dominan perubahan di pasar – lebih dominan daripada laporan pendapatan perusahaan, margin atau hal-hal fundamental lainnya.
Perubahan-perubahan psikologis biasanya terjadi dalam pola terukur. Jadi, dengan mempelajari psikologi massa tersebut, maka dapat memprediksi kemungkinan arah gerak pasar berikutnya.
Mereka yang mengetahui EWT justru akan lebih tenang di saat euforia di pasar semakin tinggi dan orang-orang berpandangan bullish secara luas. Mengapa demikian? Karena mereka mengetahui bahwa orang-orang yang berpotensi melakukan investasi ternyata sudah melakukannya, artinya sudah tidak ada lagi potensi pembeli yang tersisa – yang ada justru potensi penjual yang sedang mengincar puncak kenaikan.
Pada laporan State of the Global Markets – Edisi untuk 2013, dari Elliott Wave International milik Robert Prechter’s, ada sebuah artikel yang sungguh menarik yang berjudul “The Stock Market Is Ripe for a Decline of Historic Magnitude”.
Artikel tersebut ditulis oleh Steve Hochberg dan Pete Kendall, yang keduanya adalah editor pada The Elliott Wave Financial Forecast, dan menurut saya ini patut mendapat perhatian Anda.
“Incredibly, the DJIA rallied back to a new all-time high, a move that generated a cornucopia of ever-higher projections.
The wide array of optimistic extremes in sentiment measures includes several readings that exceed the extremes of 2007, when the Dow made its previous high. With a finishing structure that Elliott Wave Principle describes as occurring at “the termination points of larger patterns,” the market is ripe for a decline of historic magnitude.
The sudden, loud chorus of market bulls, which has grown to a full-blown crescendo, fits perfectly with the terminal stages of a major advance. This chart shows the stunning breadth of optimism extending to every class of investor.
The first indicator (second graph) on the chart shows the percentage commitment to equities in the portfolios of members in the National Association of Active Investment Managers (NAAIM). The latest reading reveals an all-time high equity exposure of 104%, which means managers are in a leveraged long position for the first time in the seven-year history of the survey. The reading far surpasses the 83% level, which occurred at the October 2007 all-time high in the Dow.
A separate BofA Merrill Lynch survey of 254 fund managers confirms that money managers’ “appetite for risk in their portfolio” is at its highest in nine years. “An increasing number judge equities as undervalued – particularly in Europe.”
They soon will become even more “undervalued,” as the Euro STOXX 50 Index has traced out five waves down from its January 30 countertrend rally high, indicating that Europe’s bear trend has returned. There’s more: Even though Spain, Portugal, Greece, and Italy are de facto bankrupt, confidence is suddenly so high in that region that Europe’s junk-bond yields relative to investment-grade debt have collapsed to the lowest premium since the start of the global credit crisis. It is an astonishing and historic display of optimism relative to a collapsing economic reality.
The second indicator shows a major upswing in bullishness among options traders via the Credit Suisse Fear Barometer Index (the name is misleading since a rising index means less fear). This index measures trader sentiment by comparing the cost of three-month out-of-the-money calls on the S&P 500 relative to puts of the same duration. The recent extreme of 33.32 on January 25 is the highest in the history of the indicator, which goes all the way back to November 1994. The CBOE Volatility Index (VIX), which tracks the level of fear and complacency using the premium paid for at-the-money S&P options, declined to a low of 12.29 on January 18, its lowest reading – indicating the most complacency – since April 2007, just prior to the major top in the financials.
The third indicator shows a new optimistic extreme among investment advisors. The 15-day average of Market Vane’s Bullish Consensus rose to 68.2% in February, its highest reading since June 2007.
The bottom graph plots the total assets in the government money-market funds at Guggenheim (formerly Rydex), showing that the public is likewise complacent about the potential for a market decline. We’ve inverted the totals to align them with the trend in stocks. When people are highly confident that stock and bond prices will continue to rise, they see little need to hold money aside in money-market funds and instead load up on financial assets. The total holdings in Guggenheim’s money-market funds just dropped to their lowest level ever, reflecting a supreme confidence by investors and a full embrace of stocks and bonds.
At the opposite extreme, corporate insiders – investors who are presumably privy to the future potential of their companies – are dumping shares into the market at a furious pace. According to Vickers Weekly Insider Report, among NYSE stocks there were 9.2 insider shares sold for every share bought over the previous week. The last time the ratio of sales-to-buys was higher was in July 2011, just before the Dow declined 18% over the following four months. As we’ve said previously, there may be many reasons why an insider sells shares, but one of them is not because they think their price is going higher.
Taken together, the breadth of extremes shown on the chart indicates that stocks are not making a short-term top: these measures are all greater than at any time since at least 2007. This is a rare alignment that confirms this is an even more important, and more bearish, juncture than 2007.”
What Do the Charts Say?
Chris Rowe, penulis Technical Analysis Millionaire, memberikan peringatan yang jelas dalam laporannya yang berjudul “The Stock Market’s LYING to You”:
“My friends, you’re being fattened up for the kill!
Major market tops take months to form. You would think that’s GREAT, considering it gives us time to lock in some hefty profits on our bullish positions.
But the longer it takes, the more euphoric people get… the more leverage they use… the farther away the thought of ever selling gets.
Then, when your position that was up 60% declines sharply, leaving you with only a 40% profit, you say “I’ll just wait until the next bump higher to sell.” But after more downside you’ve only got 30% left and you’re considering buying more.
6 months later you feel like a fool for ever saying the words “I’ve only got a 40% profit on the table.”
Market tops can take several months to form, and if you understand the market topping process, you can make a killing. But more importantly, you can lock in your profits at great prices!
There are generally two types of stock market tops…
The typical market top, and the Whiskey Tango Foxtrot top (a.k.a. the WTF top).
It appears we are looking at a WTF top.
It’s quite simple really.
So this will be a short article, to explain. But as simple as the explanation is, the psychology can rip peoples’ financial faces off, so please pay close attention (no matter how simplistic this may seem).
I’ve studied every market move that occurred over the last century+. I started managing money in 1995 on Wall Street and after moving across the street from my office on Wall & Water st., I befriended many of the trading legends who lived through those times.
Below is a “quick-n-dirty” version of both types of market tops, seen above.
The “Typical” Market Top
1. The first big move off of a bear market bottom. The first move is the sharpest move because not only do you have bullish investors (investors who think prices will advance) plunging new money into stocks, but you have another huge group of buyers — those covering their shorts (exiting short positions by BUYING the stocks back).
Market bottoms are the opposite of market tops. At market tops, there’s often euphoria where people are overly optimistic. At market bottoms, people think the market will never go up again. So short-sellers (those who are taking “bearish positions”) sell-short huge amounts of stock (with the intention of buying the stock back at a lower price). But those short sellers realize prices are advancing and they have to cut their losses. To do so, they buy back huge amounts of stock to close out their positions.
Thus, you have bullish buyers and bearish short sellers BOTH buying stock. It’s a “short-squeeze”.
2. After the boldest investors squeeze the shorts out (causing the STEEPEST advance), we have a short correction followed by another move higher, albeit at a slower pace. The move isn’t as sharp. Less aggressive buyers come in after they feel “the coast is clear”.
3. You get that final move higher. This upward slope is not as steep as the fist or second. Here, institutional buyers (who tend to actually move market prices) are not buying. They are selling into every upside move. Sure, individual investors are buying like crazy as they watch the financial television talking heads say “markets are breaking highs”.
It’s super hard for the informed institutions to exit their positions without knocking stocks down, but they try for as long as they can without spooking investors, causing a selling panic. But eventually they need to lock in their profits and WHAM! Then they sell.
At this point, the short-sellers come in like a pack of hyenas surrounding a lame calf. And they pounce!
Because the top is so obvious to these sophisticated investors, they go HEAVY on the short side. They sell and they sell. And after that, they sell more.
Remember, when they “sell” they are OPENING NEW POSITIONS by selling-short. They hope to close the trade out later by buying at lower prices, profiting from the difference. Boy oh boy do they go heavy.
And that brings us to the difference between the typical stock market top and the WTF top…
The “WTF!!??” Market Top
One of the most important and most profitable pieces of advice I ever learned from my mentor, early on, was to never forget “the unwind”!
What’s the “unwind”?
We’ll start simple: When markets are moving higher and higher, at some point those stock owners must sell. The more people buy more stock, the bigger position they hold and therefore the more stock they will have to sell to either take profits or to limit losses.
The bigger the position is (bullish or bearish), the bigger the move will be in the other direction when they realize it’s time to EXIT.
If an enormous amount of stock was bought, then when it’s time to sell the price should come crashing down hard. Now flip that around. If there’s an enormous amount of short selling then there’s only one way that huge position can be exited — with an enormous amount of BUYING.
Remember, that’s how the stock market BOTTOM was formed. That’s why the stock market bottom has the steepest advance out of the three discussed above.
The difference between a typical top and a WTF top is that the short sellers pile up on that very obvious market top and then they get SQUEEZED! Just like the first advance in a new stock market, the short-squeeze causes one final very sharp advance before the destruction of the bull market.
And that’s what is happening currently. WTF!
So what does that mean to you?
I’ve been through numerous stock market cycles. I’ve seen people get wiped out time after time and it drives me crazy! It literally makes me sick to my stomach because it truly ruins lives.
I’m writing this to you today because I don’t want you to be one of those people. You are about to get hit with a huge amount of stock market euphoria. This could last weeks or months.
Markets will likely consolidate here for just a little bit (trade sideways with a few ups and downs but ending up around the same place). But after that consolidation, it appears there will be one final hoorah!
This is awesome for those who recognize it. It can be a huge money-making opportunity or a gift from the market gods of higher prices to exit at. But if not played right, it can change a dream into a nightmare.
There are many ways to play it. And in my coming articles I will reveal the best ways to do so. But PLEASE be sure to start selling bullish positions into strength or to start hedging those positions.
You don’t want to get bearish too early if you’re not an aggressive trader. And you can certainly take bullish positions here to capitalize on this short squeeze, but only do so after a short market correction.
We are right up against the upper part of a channel which I discussed last week.”
Terakhir yang tak kalah penting, adalah grafik FRED dari King Report, serta komentar langsung dari Bill King, yakni: “Stocks are in a parabolic rally and a blow-off has commenced. No one knows the magnitude or duration; but this is the most dangerous condition for any asset. The S&P 500 Index is in a crystal clear parabolic blow-off. This used to be called a bubble.”
Seperti biasa di akhir tulisan agar kita tetap ceria di tengah-tengah pekerjaan kita, berikut saya lampirkan kembali sebuah gambar jenaka:
Terima kasih telah membaca dan semoga memperoleh keberuntungan hari ini!
Dibuat Tanggal 21 Mei 2013