The chart above reveals two key factors: 1) Based on P/E ratios, the stock market is grossly overvalued, even at current prices. As per Standard & Poor's research, the Q3 2009 P/E ratio is 138.97. Historically, a P/E ratio north of 20 is viewed as expensive. Also, historically, the market almost always corrects within a year of a 20+ P/E ratio. Imagine the impact of a 140 P/E ratio. 2) The chart clearly shows that the stock market does not bottom unless P/E ratios completely reset (indicated by the red line). This was true in the 40s, 50s, 70s and 80s. In 2002 valuations were not reset. As we now know, the 2002 lows did not last. Earlier this year, valuations were not reset either. The implications are clear. Just as ice does not thaw unless temperatures rise above 32 degrees, the stock market does not bottom unless P/E ratios (and dividend yields) fall below the reset levels, which in turn triggers a sustainable rally. Rest of the article here: etfguide Dow 10,000 - Springboard or Final Kiss Good Bye? http://finance.yahoo.com/news/Dow-1...1zcHI-?x=0&sec=topStories&pos=3&asset=&ccode=
I have no margin on my stock account and cash built up. I plan no more long trades till Nov 2009. Market is high, can it go higher, sure... but I have 2 choices, go long and lose money, or stay out and not make money. I choose option number 2. This is for longer term swing trades only, future trades will be based on intraday charts and could be long or short.
moron, your call is no less a PREDICTION than anyone else's. You try to predict the market, a futile exercise to start with and COMPLETELY worthless, actually contra-productive, to any consistently successful trader/investor.
fully agree. He put all those few on ignore that had >10 years trading experience and tried to tell him that predicting markets is worthless to start with (a valid criticism in this thread). He seems to have a very hard time to handle criticism, so I would also believe he now has a hard time to handle his stops as well...
Hey Guys, nobody finds it funny how this guy is defending his call as if it means anything whatsoever to the market, while those who hold positions on the back of trends sit back enjoy the ride up, UNTIL the trend is clearly broken? Some talk a lot in life and need a whole lot of explaining why they are not wrong while some others simply follow the market in a pretty relaxed manner. A pity some make their life so hard...
buddy, now you are clearly wrong. Several people with a whole lot more market exposure have told you that making predictions in the first time is meaningless because you will most of the time be incorrect. It really does not even matter whether your one call was on the right or wrong side, but you are just to arrogant to actually swallow that.
If you stick to your story long enough, youre always proven right If you don't understand that simple fact, you will lose every time
that is TOTAL bullshit. Anticipation has killed tons of people even the greatest of traders. Following strong market trends can get you out of your position at small loss but at least you are on top of the big moves. Its all a matter of implementation but for sure anticipation does not get you anywhere because NOBODY knows where the market is gonna go next. By the way, the risk of calling the high as this guy did was WAY HIGHER than the risk of buying into a long position on the dip (down to sub 1019) on the back of the longer term trend. In that the OP clearly showed he had no regard nor respect for basic probabilities.