We drop 8% from here with no intervening bounces. Those looking to get short on a retracement will be left behind.
imagine....8% drop, wait wait wait. xmas is here and seeing a drop in this market would only be a negative for the holiday season, we couldnt have that now could we. Kids wouldnt be getting their new ps3 at $3000 a pop....come on....
While I was being a little "tongue in cheek", I do believe the market will do exactly what people expect to be the least likely (ie, no one is 'positioned' for that outcome). What i think i see is everyone waiting for a decline to begin and then a retracement to get short. I don't think anyone is expecting a straight 8 to 10% decline from here. U.S. dollar will be the trigger. That's where my money is, albeit with a stop.
The other side of the trade, those who are long, think they will have a retracement to unload their positions before more damage is done. They'll be stuck and will puke out of their positions in a rapid hurry. Then again, this is all speculation on my part. Good luck out there.
Hey Stock Trader....Otherwise known as permaBULL....Just because I really don't agree with almost anything you say, I would like to let people know how well you did since your famous post on 6/29 where you called out the 5 stocks that you have to own in this next great bull market (Like it's not 4 years old)....Without going into any real performance measurement like (Sharpe ratio, MM, portfolio alpha or r squared) for your 5 stock portfolio investment and not accounting for the extra risk you took, Lets look at how you did... The increased risk should have greatly compensated you in this great bull market, but did it...As of November 16th... HANS--(-39.9%) TIE--(-14.7%) CHAP--(15.77%) GOOG--(18.69%) AAPL--(45.18%) Equally weighted you made 5.008% as of November 16.....You under performed the indexes by 6% and 9% respectively....Man where do I sign up!!!! OK I know!!! Chap was up 7.19% today AAPL was up 0.28% today GOOG was up 0.58% today HANS was down -1.93% today TIE was down -0.25% today WHAT A GREAT BULL MARKET.....RIGHT!!!! I was up over 1% on a day when the market was flat.....So lets give you 6.5% return to be nice...You should start a hedge fund!!! All of your picks are extremely volatile and should have greatly compensated you during a period in which the S&P 500 did 11% without a dividend payment and the Nasdaq 100 did 14%...I reiterate your problem was under diversification and valuation...Classic example of what worked last year will work again this year... Just thought I would share this man's ability to call the market...BTW you should have sold your CHAP GOOG and AAPL with me today... $COSTAverageMAN
Because My post got lost in the mess and it could be important!!!! Personally I would be selling all spikes and resistance levels for your personal stocks.....We are not in some crazy bull market where everything is moving up... ANYMORE....In fact I can show you about half of the s&p 1500 stocks (Large, Mid and Small) hitting resistance and pulling back over the last month....The pull backs have not been strong and hence the market index goes higher, but they have found tops and only rally on the extremely strong days.....Some broad market indicators suggest that the market has actually begun to correct over the past three trading sessions and I personally have continued to sell into this rally....The profit taking only makes sense to people who were buying in June and July, because they have incredible gains over the past few months...All the while the sheep are pushing their luck still hoping for the incredible gains in stocks that have moved straight up, but forgetting the fundamentals of this 4 year move...Personally I think the smart money manager are slowly getting out of positions at these levels and selling a minority of their positions to the sheep....Bottom line "If you are buying right now and plan on holding the position as an investment and your stock just hit a 26 week high over the last 20 days and is a small to mid cap stock that can't capitalize on a weakening dollar in 2007....Your upside is 12% for a six month holding period and your downside is 35%....Dumb statement I know, but looking at the broad market is the only way to get a grasp of what is going on....DOW @ 13000 is good only if you own some of the 30 companies in the DOW....s&p 500 @ 1400 is great, but what if you just got overweight small cap tech and software right now....Kind of missed the boat if you get my drift...Kind of missed the boat in most sectors if you get what I'm saying....Just be careful out there and own companies that can handle a real downturn in the market....Remember the PONZI story....It will come and it will be just as painful as May and June.....WHY? Global market will tell the tale again.....IE) India, China, Hong Kong, Brazil, Europe, etc....Money Managers are not idiots and having an index move in one direction since JUNE will bring in the profit taking at some point and hear me "loud and clear" when the money starts to flow out of global indexes it will be another panic selling situation across the globe...Some indexes are moving above a 40 degree angle...Can you say bubble?....Anyone who knows anything about index history will say the same story when index's move at this angle "BOOM TO BUST"....If we go another 3 month's top at this rate without any medium size correction....Then BUST some global event will cause this....Good luck getting out the day it happens... Of course once again this is a place where everyone is in and out all day long and nobody cares about longterm outlooks...Most people won't even hold overnight and I understand why...RISK TOLERANCE....It's actually quite smart at this point in the bull market....So go long, go short and follow the trend, but remember paper profits are just paper...Don't spend like it's real until it's realized... $COSTAverageMAN