Forgetting the equity market for a minute, I'm just curious about the "fundamentally strong" US economy - because it's not the first time it's been said. It's often used by perma-bulls (well, one perma-bull in particular, that is) to support the argument that the stock market is going up. Of course, I don't see a fundamentally strong US economy right now; I see an economy that's more like a sick junky on artificial life support, who keeps telling himself that everything is going to be fine. I mean, we have massive debt that's poised to grow exponentially, an economy built on irrational consumerism in which the consumers are losing their jobs, we have a manufacturing sector on its very last legs, a failed financial system that's being confiscated by the state.... where's the strength?
But the markets are already 20% off the lows and the econ data hasn't showed any signs of improving. When times finally appear bullish the markets may be 50% off the lows as in the case of 2004 following the tiny 2001 recession. The recovery is priced into stocks long before it happens so you need to be bullish when things appear at their absolute worst. When an economic recovery is confirmed most the potential upside gains are gone.
Consumer spending has contracted very little. The GDP retreated 3/10 percent, a smaller contraction than expected. Unemployment is only 6.7% , which is just .7% higher than the upper end of its historical range. The gov. spend money like drunken sailors during GW Bush Administration to pay for the tax cuts, Iraq war, the occupation, and yet the stock market surged.
.... one thing I forgot to mention - and I'm just throwing this out there for the hell of it - we have an entire society of people who have forgotten how to spell. I've seen the word "here" been used in place of "hear" 3 times today. Why can even educated people no longer spell?
Don't take my response to mean I don't go long now. I realize how the markets work. When I see data that SHOULD push prices lower but ISNT I trade accordingly. The difference is, I was making great money shorting the ES over the summer and fall intraday while you were holding longs and getting buried by falling prices.
so why where you so bullish when we were at highs last year and all through the downward spiral..??? from this quote you should have been bearish...
Picture perfect climax bottom on November 20th. The two blue candles got canceled out by two huge white candles of equal volume. Also note how the volume surged.
Excellent point EC. If you plug the opposite words into stock_trad3rs very OWN quote, he should have seen the selloff coming and gotten short! "But the markets are already 20% off the lows and the econ data hasn't showed any signs of improving. When times finally appear bullish the markets may be 50% off the lows. The recovery is priced into stocks long before it happens so you need to be bullish when things appear at their absolute worst. When an economic recovery is confirmed most the potential upside gains are gone." (Stock_Trad3r) "But the markets are already 20% off the highs and the econ data hasn't showed any signs of worsening. When times finally appear bearish the markets may be 50% off the highs. The selloff is priced into stocks long before it happens so you need to be bearish when things appear at their absolute best. When an economic downturn is confirmed most the potential downside gains are gone." (rew3rded)