Global Market Bearish Call

Discussion in 'Wall St. News' started by outoftheplane, Aug 26, 2005.

  1. Guys what do you have to say about David Randolph's call on the market:

    I don't want to make a long text explaining why I'm turning bearish on the general market, so I'll tell you why by topics:

    1) I believe there were two fundamental reasons behind the medium term bull market that we've had since March 2003:
    - Monetary policy gave the first push up (SPX up from 770 to about 1000 points), when a famous article written by Ben Bernanke said the FED would prevent deflation by printing money.
    - The second push, from 1000 to 1240, was made by a believe in global growth led specifically by China. I was bullish in global markets because two major players were coming to the global scene, India and specially China.

    2) Those two fundamental reasons are no longer in place
    - The FED now is rising rates every chance he gets.
    - China is hot only in the talk, but the money shows a different story, take a look at this:

    China's stock market is in a bear market since May 2004. There's no more reliable bearish divergence than the world being bullish on a country that's going down.

    The FED is no longer our friend and China's growth is no motive to buy stocks as we've seen. So there's no bullish fundamental factor to keep on buying. If there's no motive to buy, there are a lot of motives to sell (FED tightening, China may enter into a cyclical recession after more than a decade of an average GDP growth of 10%), and that's what investors are starting to do:

    The S&P 500 Index broke two important supports yesterday.

    The general market trend is bearish now, so one should be under invested. We have 66.6% equities and 33.4% cash in the 3 Stocks on Fire Portfolio. I want to raise the cash portion of the portfolio to more than 50%, looking just for individual strong stories.

    David Randolph
  2. There are still several small non nuclear countries to invade if another bear market dictates
  3. Humm....Mr. Rundolph didn't mention anything reg high oil prices and the consequences of higher mtg rates and how both will affect the markets....

    But it is obvious it's not peaches and cream anymore imo.....

    Down we go with all my shorts ITM !!

    p.s. like always once a trader joys about his positions, the market turns around and screws I won't be happy until P/L is realized....until then, anything is possible....:)
  4. yes...



    but the single greatest one would be...


    70 MM barrels of oil per month!
  5. (We were hoping we could manage that one by ourselves (uk))
  6. jonnyy40,

    while I respect your opinon... we don't really give a damn :)) )

    NO war... and I mean NO war can happen without our fair country playing atleast a 50% role...

    I mean WE are the RICHEST country EVER. We have so much money in the bank we could fight a war aginst 5 countries the same size as our!!!

    IF you don't believe how rich we are...

    check this CIA link out:
  7. We are definitely not going lower today.
  8. Somehow, I knew it was our fault the Hutus and Tutsi are fighting. If only we had a smaller trade deficit....

    "that most insignificant object of modern policy, the balance of trade" Adam Smith, Wealth of Nations