Unfortunately, my yesterday's call was right, the market was lower today, then took off after Fed meeting, another all time high for Dow. I can not be in good conscious to buy here, I need and should be on the short side. But I think the end is near.
- Shanghai index crossed 4000, last time it crossed 3000, then the 3rd day (Feb.27th) it was off 9%. So we have a big test on Friday (also 3rd day after it crossed 4000), do the speculators in China take profit before weekend?
- Chinese financial news have stories saying the average workers are borrowing money to buy hot stocks, some officials use government money doing that, so I don't see much steam left in this bubble. Yes, at most a few months, my take is a few weeks, before it has another 10% drop like Feb.27th.
- And Richard Russell, a super bear, has finally thrown in the towel on his long-standing bearishness and predicted an "unprecedented world boom."
- CNBC has a "million dollar challenge", is this another indicator we're in a hot market?
- Goldman Sachs' Chief U.S. Equity Strategist Abby Joseph Cohen has raised her year-end forecasts for the Dow 30 and S&P 500; she now sees the blue-chip index hitting 14,000 and the broader market barometer touching 1600. Last time she called a thousand number target was in 2000, calling Dow 12000 before the market crashed in 2000.
- And if we find the tapes the market gave to us from previous Fed meetings, usually, the market has second thought after the Fed meeting, that is, it usually go another direction the second day. Let's see how tomorrow plays out.
Invitation:
- I like to thank the readers on this blog: pbierd, curt504, Dmitry, David, Min, Fred Wallace, hlgold, floorsmall, 7ryan7 for your comments on this blog. Some of the comments are good advices that I should follow. I like to invite you to comment and add your recommendation, hopefully we can all learn from each other. You can comment in this blog, or the following blog. http://simplecommunity.blogspot.com/. I hope we can find the consistent winners and learn from the picks; or consistent loser (like what I did recently), then we just go against the loser's pick, but she/he has to be consistent!
- My bias is to short, but keep enough cash to live another day, so you can short at a better entry.
- Eventually, we can all make money by listening to other ideas.
5 comments:
You're not alone in feeling this market is way over extended. Timing a market drop is a lot more difficult than finding an entry point after a correction. I too was burned by investing in the QID around 52. I got out and reentered at 47.38. I'm comfortable here as the volume on the QQQQ, SMH, and XLK is drying up. Low volume on a move higher typically signals the end of a run.
But who knows what the correction will bring or when it will occur. I'm saving most of my powder to enter long positions in silver, gold, and oil refiners.
It's been painful for the bears lately!
David
Great move David. I had a little success in buying DIA puts and sold quickly. Ever time I sold, it dropped again due to another record in Dow. But it's hard to play this.IWM is the weakest among index ETFs, maybe a good target, the inverse is TWM. And Gold goes no where so far. I'll wait to enter gold. Bill
If we have bad data in PPI tomorrow and CPI on Monday, then this bull market is over, we may see a sharp crash. But, let's see how the next two trading days go before we jump in to short.
I heard Wayne Angle on CNBC. He seemed to be a very creditable witness. His story is there's no real inflation to worry about, not since the unions lost their monopolistic control over wages. Also, the fed should cut rates to help housing. Fast money is looking for a weak open Fri. but using tight stops if it turns up. Personally I'm short amzn hoping for another dump day, but also have tight stops.
Thanks for the great market analysis. I am long term bull but think we might have a short term top here, 2~4% drop in Dow is very likely, so I just added some puts on OIH, XOM as I think OIL demand will go down with US economy weakens further. But I still keep my cash level high and ready to buy the dip. I think this recent Bull Run will resume after the short break and push Dow to 15000 sometime this year. Don't worry about China, though speculation there reaches unprecedented level, there are still plenty fools desperately want to jump in. I don't think Shanghai’s market will drop too much before the next year's summer Olympics. So we still have at least one year Bull Run!!
Post a Comment