I saw a statement on CNBC something like this "Broker: Clients have lost confidence in the markets". I think another statement was "Flash crash remembered". I think investors and clients want to sell their shares/stocks because of uncertain future but brokers are stopping them. There seems to be more and more talk about a possible looming market crash. Many fortunes have been made by smart investors during crashes and recessions. Are the recently pullbacks in PM prices possible warning signs of something greater to come? Should we have some spare cash ready to buy in the event of a crash? Are there better investments to buy than PM's, in the event of a market crash? Certainly not wanting to generate any fear, but curious to hear people's opinions on this. I personally put a significant portion of my wealth into PM's recently and am wondering if I should consider selling some, in order to buy back in the event of a crash.
1) PM's?......precious metals?.....premenstrual syndrome?.....pepperoni-mushroom-sausage?.....project manager? 2) You will never generate fear. 3) Precious metals and the stock market seemed to correlate well to the downside recently. In the event of a "crash", BOTH markets should move hard to the downside. 4) Sell everything, get into cash....and wait for the crash that you desire so much.
Who cares about Flash Crash. Was followed by Flash/Instant Recovery. Just a minor glitch. That is the way the system works these days. It is to be expected.
You may be waiting another decade before the next swan fly by. I could be wrong but statistically it's a pretty damn rare event.
They don't want to sell yet, they'll start selling when there's enough fear in the market. Right now I think the baby boomers (main street) are complacent and still sitting long feeling quite good about what they've made back since the last 'crash', which they don't even see as a crash because they made everything back. (Many main streeters didn't actually sell out in the crash, they've held on) I do think though that they are READY to hit the sell. In general I find that the older generation doesn't really care what happens to the generation after them, so I do see a point where they will call it a day, and take what they made, not caring about leaving their capital in the market to finance the next generation. This mentality could cause a MAJOR down move in the S&P to crash through the lows. I've been observing the behaviors of many wealthy baby boomers who are all in the market, and I find they are losing confidence. After a lifetime of looking up to wall street like they are gods, they are starting to believe that they are crooks. I have been watching the pullback in commodities and I find them peculiar. The reality is a new cascade selling event could be closer than one thinks. Nobody can predict the day it will start. I think it is very important that all speculators on this board all start pounding the market on the short side when the time comes, to roll the ball for one another so to speak. I think if bears could work together in some central fashion, we can achieve stellar raids just like in the 20's and 30's. The problem is, many bears don't want to work together these days. Bulls work together all the time, and one of the misconceptions on main street is that stocks or the market going parabolic is not dangerous compared to the market going down just as hard. Pullbacks in a bear market tend to be fierce and hard. It is possible what we have witnessed is a gigantic pullback from the March lows bottom. If this is the case, the large rewards could be on the downside, as opposed to taking an outright long position at this point. The difficult thing is the media may create some sort of diversion or event, and freeze the exchange so you wont be able to enter your shorts. The inside of wall street will likely be short the week prior. The weak hands may be stuck at that point. The risk reward becomes more dangerous as the cascade starts. When the cascade selling occurs you will find many bulls in a state of FREEZE where they don't know what to do. They'll start calling their mutual fund brokers but the lines will be so busy that they won't answer. If their accounts are self-directed, they may have a chance to get out at the end-of-day settlement IF THEY CAN PLACE THE ORDERS THEMSELVES VIA WEB. This FREEZE scenario is what you don't want to get caught in. Make sure when you start to feel unsure you COMPLETELY get out. It's not worth the risk in my opinion, you can always go long if it bottoms after months of selling, or if you are crazy like me you can become a bear. >Are there better investments to buy than PM's, in the event of a >market crash? The best thing to do is start short selling securities if you start feeling suspicious. If I were you I wouldn't start buying if it goes into a freefall, trying to catch a bottom. Without any reference point on the way down, you can really get killed. When the 2008 crash occured I tried going long a number of times before OCT 13 2008, trying to time those 'violent pullbacks' to the upside, but it was difficult. If you look at the candles on the S&P there was literally no reference. The cascade period I'm talking about was around 11,000 to 8,000 on the Dow. I kept thinking to myself, there's no bloody way it can go lower than this. Go look at the daily hammer around 10,000 Dow. Many on the street thought that was a big bottoming event. And it kept going lower the next day. A panic feeling sets in your stomach when you trade with as much leverage as I do. Yet those days I was trading the ES futures at the time (on top of being long emerging market ADRs - which raided much harder than our markets), and trading on a 2-minute chart was scary to me. I ultimately sold out (flattened the account) somewhere around 9,000 and took the licking, as I thought I was going to blow out my account. I honestly thought the market was going to crash to zero, many did. I then went all in, as explained below. The fear is that you would get a violent 'uprising' in your face, so in a freefall like that simply going short is outright dangerous. You get in a panic and you almost freeze (I'm talking about days like OCT 15 2008 951 pt raid. Or the 868 pt raid on OCT 9 2008 Dow) My biggest + day in all my trading occurred on OCT 13 2008. It was the largest single day gain since 1933 on the big board. I remember at the time the market was selling off in the morning as it had been for weeks, then out of nowhere everyone on the floor started cheering, I went ALL IN (levered to the max)...this is an instinct you learn as a speculator, you need to know when to put the foot on the gas and react INSTANTLY (you had 2-3 seconds to decide or you missed the move. It was a balls of steel move because I was 100% in cash before it happened. Everyone went long and it SOARED literally. All of my positions went up 18-28% in one session. Even more crazy I thought there would be follow through the next day, I made even more. I held long over night. In the morning the market gapped up, and I sold into that extra move up, but it was supsect. It stalled. In a single button I sold half of the entire account right at the tip top (OCT 14 2008). This formed a High Wave on the daily chart you can see it. Then on OCT 15 2008 the largest single day loss occured since 1987. So if you go back to OCT 14 2008 when the high wave occured, I sold half of the account at YM (CBOT) at 9,800 or slightly higher (15-min). You see a pullback that occured. I started freaking out, that this pullback was fake and going to reverse and collapse. Look at the 15-min YM on that day, and you'll see it where it triggered a bullish move after dipping below 9,800 then FAILED EPICALLY. In that panic I sold the remaining half of the portfolio for huge profits at slightly below the 9,800 level on YM when it stalled and didn't follow through beyond 9,800. The market then deteriorated. The next day I avoided that nasty 951 pt Crash. This is what I'm talking about. In order to embrace our wall street utopia, speculators must work together, to roll the ball for eachother. It has always been done this way. Weather you were B.P. Hutchinson or in the Gillipins News Room, people always worked together. It is only then, that you will realize the true meaning of being born a capitalist, and how it is our birth right that the exchange exists because of us. For that instant in time I felt that no matter what happens after on Wall Street, I got to live through such a monumental event, that I may in fact never see again in my lifetime, but one can only hope Send me a PM if you want to discuss (or anyone on here). Remember...if Bears work together we can achieve great stellar raids, just like in the 20's.
These Profits/Returns Exceeds the Historic Winning Runs http://www.elitetrader.com/vb/showthread.php?s=&threadid=219492