Screw this market. You're going to see mass redemptions stretched out between now and February. I've never felt more confident. But I could be wrong. We'll see.
There is nothing wrong with a "when in doubt get out" strategy. Personally I will probably wait until we approach the previous high before making that decision. The only other problem is when you are out, how do you know when to get back in? It will undoubtedly be at higher levels than you sold if your assessment of the market at this time was incorrect, or you will have to wait for the next large correction before getting back in. Decisions. Decisions.
You may be right... but I think you're wrong. I think most people wait til the end of the year thru the April 15th deadline to do their $4K - $8K IRA $$, and it's all going to funds and stocks. That's a lot of liquidity that's still not hit this market yet. Add that to the shorts that are going to get squeezed when it happens, and I don't see an end to this bull for at least a few more months. I'm sure we'll see lots more ups and downs in the meantime, but from where I sit, it looks more like the market trying to shake out people's stops than any real profit-taking. Look at CSCO and DVN today... I'll bet some people sold yesterday and are crying now. I'm sure they'll both bounce some more, but I don't see a down trend anywhere.
I got in on CSCO, MET, and STJ today for a swing trade. CSCO was so strong today and that candle sure looks like there is more upside.
I have a question. I asked this on another thread, but this one's shorter. What are you going to do with the cash from your selloff? I get sad when I think about only 4.5% interest, so I can't do it. Then I think, home improvement projects (HEY... HD... LOW... hehe). But the money would then be gone. I'm not selling anything, because I know that if the market dumps 10% even, that's a fraction of my 4 month overall profit, and plenty of time to decide if I want to liquidate at that point. But for those who sell... do you just sit on cash for months waiting for something to buy?
I had the same problem with my mutual funds in May. I went down to 50% cash and bonds in mid-May in one lump sum. I didn't start increasing my exposure to stocks again until late August and I did it at a rate of 5% per month so I am sitting at 65% when I could have been at 95%. I pretty much permanently missed out on a great trend. By the time I get to 95% it will be time to lower exposure again. I guess the lesson is not to do anything in large sums over a short period of time.
http://stockcharts.com/h-sc/ui?s=VTI&p=W&b=1&g=0&id=p68734461456 The first rule of trading, trust the chart. It appears there is a hanging man at the end of the chart for this ETF that tracks the total domestic market. However, its more then just a hanging man. There are many obvious signs. One report on durable goods caused the downtrend. There are a few more reports to go this week and then the cold snap which will drive oil prices not to mention the Saudis waiting in the wings. Possible recession next year... I believe the best way to go in uncertain times is a balanced mutual fund like the Wellington Fund which uses quality large caps and bonds. It did fairly well through 2000-2002. So if you are wrong (which I dont think you will be), then you still can get some upside. Where as if your right, then the downside wont be as bad as an equity only fund.
which market? stocks, gold, oil, corn, wheat, etc? why do people have this narrow view that the Nasdaq Composite (or S&P) is THE MARKET and there are no other opp's out there. if that is going down, there are no other longs for pete's sake. it's like all the people who didn't want gold when it was $250. or don't want oil now (and the last week) when it is a great trade/investment opp. Corn has been off the hook the last few weeks. Gold, etc. part of being a trader is adapting to changing markets. this is not yer daddy's bull market. it's not 1999 all over . it's not nasdaq tech momo junk. it's a value rally. and then there was the transports which have totally been insane the last couple of years, and the russell you should be 40% cash. you should be putting your money in good opportunities. they are out there but if you limit yourself to a narrow subset of vehicles, you obviously may see it as a messed up market.
I think he was talking about cashing out some mutual funds, right? He was originally talking about redemptions so I automatically thought he was talking about mutuals. Maybe I read wrong. Im saying if you feel like cashing in your mutuals because you think trouble lies around the corner, then go into a balanced fund of large caps and bonds.
eagle - No. I sold 40% of my stock portfolio today (I sold all or part of my positions in 8 individual companies). I did very well since June - I'm up about 32%. But I just feel stocks will be much cheaper in 4-6 months because of the currency and housing issues that are going to start hammering cyclicals. I don't believe a recession is avoidable now.