Britt, those are all perfect examples of overblown stocks, in your list I'm especially fond of JBIL-what a chart, KO, and AMD. JBIL is my prime candidate for a put when the market turns, I think its up 1000% in one year.
Give me one of your picks for our short contest starting Monday.
I have been quite neutral/bearish over the last couple of weeks however in the last two days my bare body is jumping out of its bear skin. Catching the top though is somewhat like the lottery though, so I'm buying long term in the money puts and will ad more as it cracks. I do feel the next 2-3 months will be down, if we continue to fail 8000. In this market I only feel safe short a company thats way on the ropes and the chart is got a nice downward trend, otherwise it gets bid up (if hysteria continues only a ticker symbol will be needed to be bid up - how about KHNA - Kahuna Inc.-gg-)
After thinking over Abelson's supply-demand dynamic and the large amount of money chasing small amount of stock, the little gears started creaking.
Consider this:
1. Prices skyrocketing up - soaking up stock money
2. Bond yield going down fast - BOND VALUES GOING UP FAST
Panic buying in bonds - to lock in capital gains and out
of overheated market soaking up stock money
3. People moving out of stocks into cash, somebody is listening to
bears, not many though soaking up stock money
4. People moving out of stocks into futures options and other
derivatives to increase leverage in heated market - supply of
derivatives unlimited soaking up stock money
So here we have it, a extremely high level of short selling and a dwindling supply of money to keep the big mo going.
Add in a touch of Clintongate and a dash of capital gains tax cut - can you spell K-a-h-u-n-a?
I've done all of the above, got to believe there are lots of others following same strategies. I wonder if anybody could quantify the above money flow scenario?
Something to think about - I think it's sooner than later. But will have to continue failing 8000.
regards,
bob
Disclaimer: Listening to a Kahuna could be hazardous to your wealth. Those that ride the big waves wipe out, more often than not -g- |
