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Strategies & Market Trends : Ride the Tiger with CD
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To: jrhana who wrote (52310)5/19/2006 1:21:17 PM
From: 4C  Read Replies (2) of 313075
 
The fact that sharp, vicious, and scary corrections are typical of bull markets is my main consolation.

I certainly hope so jrhana, I bought many of my favorites today not knowing where the actual bottom will be. This whole rally in the miners which really took place in the last five months reminds me a lot of the Biotech Genome rally of 2000.

Obviously the fundamentals here are not the same and since I don't see metal prices going down anytime soon, I believe the outcome will be different. Nevertheless, the chart movements remind me of that time.

Back in 2000 they were successfully mapping the human genome. I got into some of the promising stocks in late 1999. By early 2000 we could see money coming in the biotech sector. In three months everything that had to do with genes became a 10 bagger. I remember everyone mentioning "this time it's different," and those words still make me shiver as I hear them mentioned when there has been a major advance in another sector.

Needless to say, I have never made and lost so much money in my life. There were several sharp corrections back then as well and every time they got bought...except the last one, while everyone kept buying thinking we will go up soon, the stocks kept going down. The big boys had laid the trap for the retailers and had decided to liquidate. The stocks gave back all their gains within a month and the party was over.

As I mentioned earlier, the fundamentals at work in the metals market today are solid. Higher metal prices are here to stay and miners will be rewarded. However, something about watching these stocks plummet in the past few days keeps reminding me of the biotech fiasco of 2000.

STF
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