creamer says buy more....
Selloff Conditions in Play Won't Score
By James J. Cramer
04/09/2003 09:20 AM EDT
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Bulls significantly higher on Chartcraft's Investor Intelligence poll. VIX under 30. Plus 4 on the S&P's proprietary oscillator. All of these are conditions that have, each time, produced a selloff of some magnitude, if not a massive one. Will it happen again? Are we doomed to fall?
This, my friends, is where the rubber of the 10% gain I am still expecting in the Dow hits the road of Dow 7500 retest.
And I am betting that the rubber wins. I think this time we will break the pattern. I think this time we will meander -- with no meaningful decline -- until we work off some of the more exuberant conditions.
All the other times we've reached this level, I have suggested large selling to combat the coming losses -- "taking it off the table."
This time I am not doing so. I might do a little trimming, but nothing too defensive. I am looking to buy, not sell, here because I believe that confidence is coming back, the president has a strong hand, oil is going lower and the economy, the part not dominated by telecom and tech, is going to get better.
Basically, I am defying my own rules.
I get a lot of heat for a lot of silly stuff. I tend to accept it as part of the equation of being pretty public about just about everything.
The only time I think the critics can make solid points is when I go against a prevailing doctrine that has worked for me: Sell at 50 on the bull/bear, 30 on the VIX and plus 5 on the oscillator I follow (which is different from Helene's).
So I'm out there. I am not taking it off the table.
I am nervous, I am worried and I am anxious.
But I am not leaving this market when I think there are nice gains ahead after a consolidation. I am saying that we are going to break the pattern of overbought-look-out-below. If I am wrong, I would expect no less than to hear from you about it. And don't worry, I'll feel the only real lumps that matter in my personal Action Alerts PLUS account monies. They matter to me. I am putting them in financial harm's way.
Sometimes you have to take on a little more risk to get a much bigger reward.
I think this is one of those times.
Random musings: Seth Tobias has been playing this market right.. So has Doug Kass. And if you listened to Herb Greenberg, you got out of some really catastrophic stuff. We all will be on hand, along with my partner Larry Kudlow -- we'll be doing the show from down there -- for the second annual hedge fund conference. Many of you have asked me for help in setting up hedge funds. Others want to know what all the hoopla is about. Still others want incremental ideas to break out in the performance game. We will do all of that and more, including kicking around some novel ideas I have for an industry trade group. Sign up now for the conference. I make it a policy not to help people who want to go help rich people make a lot of money; too many others do that for big fees. But I violate that policy at the hedge fund conference, where I do everything I can to help. Check it out. |
