Discussion in 'Trading' started by bungrider, Mar 28, 2003.
He also left out the ever-popular profit taking / short covering.
If you listen to company prognostications, they rarely have anything positive to say about prospects for the remainder of the year. (No suprsise -- saying there's still "excess capacity" is being kind.)
Hopes for a second half revival are basically just that -- hope. Based, it seems, on little else than that the economy has been been sputtering along for a while now, the stock market has been heading down for three years now, and that, well, it just "seems" long enough.
That's pretty weak.
Yes, I hear all the market climbs a wall of worry stories, but there's also a danger in clinging to past phenomena like that. Is this time really so similar to 1982 (BIG concerns back then too)? I'm not so sure it is. They didn't have the multi-year Fed engineered (in essence) bubble that had recently burst.
I'll have to check, but what were debt levels entering the 80s? I'd bet they weren't anywhere near today's.
My view is that America is a sneeze away from a double dip.
I hope I'm wrong, I really do, but I'm playing it negative until given reason to believe otherwise.
Anybody ever plot the number of curbed days on the NYSE???
Seems like it may be a good contrarian indicator of when we've hit an extreme...or maybe that a curbed bear market rally is followed by a number of curbed down days...but this is just based on what we've seen lately...
One good curb deserves another.
Or maybe even what time of day the curbs are hit...
Bungrider, you should read "Conquer the Crash" by Robert Prechter. It makes a great case why the bearishness we're starting to see is just the beginning of what could turn out to be a deflationary depression that would eclipse and surpass that of the 30's. A lot of the technical analysis is based on Elliott Wave, which if you believe in shows us currently at the end of the fifth wave of a grand supercycle, signaling in essence the beginning of the mother of all economic and market declines.
I don't know if I fully subscribe yet to the prognosis that we're headed for a biblical style meltdown, but I do believe that at best we're looking at just barely getting by economically for many years to come due to a myriad of factors.
So go short and make a killing.
My dear sweet brother Noompsie! As a trader it's much more profitable to ride the ups and downs in any secular market rather than take one position and hold it. Even in the worst bear markets there are always powerful bounces that are worth playing. But if I were just a retail investor and not a trader going in and out I would be long term short.
Its always darker at the bottom of the hole
Alot of people get on Prechter's case, and in some instances for good reason, but the man has some really keen insights. In a thread a few months ago, I mentioned that what I think Prechter really excels at is his perception of how economic events preclude drastic societal changes...He makes the case that it is cyclical by nature, and that if and when economic calamity begins, social unrest is certain to follow...If you read some of his predictions for social events to occur following the onset of a prolonged bear market, it is very prescient...He has definitely argued his case well, however his market "timing" was so abysmal, and in some respects so unnecessary, that he is like the boy who cried wolf...
This is true. However, I am beginning to think that even the last 2 1/2 years were still somewhat corrective in nature, mainly because the volume and public interest was still high. By corrective, I simply mean that we were still unwinding or in liquidation, and therefore the volatility was still there for some extended moves with plenty of residual momentum...
Now that we have entered into the true depths of this bear market and the action is either extremely high velocity "surprise side" price shocks, news event risk or very low velocity price chop, it seems to me that we are now in the "true" bear market...The one that the old veterans referred to in the course of market history...
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