time to short the market

Discussion in 'Stocks' started by fareastcoast, Jun 24, 2013.

  1. You know the saying....don't fight the fed.

    Well, the fed has decided to stop printing, it seems correction to DJIA ~13000 is imminent.

  2. bonds


    Who said the fed has decided to stop printing?
  3. The fed will taper soon, it's just a matter of time, probably by this fall.
  4. Fed is still buying bonds. Bernanke hinted at tapering, which is buying less bonds, but not the cessation of buying.

    Recall the QE 1 ended March 2010 and QE 2 ended June 2011. In both instances stocks still managed to rally another month. This time, the Fed is only tapering, not ceasing bond purchases. There's no reason not to expect another strong rally back up from SPX at 1566 presently as I type if one expects a repeat of recent BTFD experiences.

    However, looking farther out, some think that QE has become less and less effective. Just look at the idea that bond purchases were supposed to lower interest rates, yet we've seen a surge in rates. Es no bien para stocks.
  5. hayman


    Book profits, and open Short positions in order. Markets will tank big time from hear. China ready to implode. Bernanke will be remembered as the guy who destroyed the world economy.
  6. pfranz


    I don't think so.They are just trying to structure their system instead of putting continuous stimulus in place to keep an 8% growth each year.
    I can't even think of someone who wants to do "quantitative easing" to reach 8% growth instead of 7% or 4%.
    Maybe China understands that stimulus is not appropriate when you already have growth: better to build a sane system which can last over time.

    Bernanke HINTED at tapering IF ECONOMY IS FINE.
    Do you really think US economy can grow by itself? Yellen said it's not time to stop QE.
    I'm curious to see what they'll do.I wouldn't be surprised if they announced an INCREASED QE4.
  7. pfranz


    Another thing I remember, when Bernanke made announcements like for example operation Twist, the market fell in the following days but in less than a week time it had already started a long rise.
  8. hayman


    Their real estate market is about to fall over, and seriously mimics what we went through 4-5 years ago. Large mortgages outstanding, vacancies galore - akin to a pyramid scheme. This, in itself, will devastate their already-fragile economy. Look out below, IMO.
  9. pfranz


    Though I'm no China expert, I can agree that their economy is fragile (see their overnight REPO) and real estate has problems.
    I believe there will be troubles, but big difference is THEY ARE GROWING, they are in the rising side of the cycle.
    US is in the falling side of the cycle in my opinion, so its real estate problem can't be compared with China's. In western countries there have always been estate problems where prices halved quickly.But they went up again,in general,because the economic cycle was rising.
    China,as the rest of the world,will surely be impacted by west countries problems, but from a very different situation.
  10. aknaya1


    I think we have another leg up before shorting.
    #10     Jun 29, 2013