Don mentioned window dressing as a possible reason for not letting things down. Maybe so.
Regardless I am serious that I will be backing out of the market for the most part since I cant day trade from work and there is just no way I will hold this stuff long at these valuations when my charts are bullish biased.
I will be going to high dividend yield stocks, bonds and some commodities when the market is bullish according to my TA and then coming back to short stocks when my charts turn bearish.
Commodities aren't that hard, just watch supply and figure in demand. Coffee was an easy short since Vietnam started flooding the market with cheap coffee beans. Soybeans and wheat have been in a long sustained down turn since Canada has been flodding the markets. Mainly you can just watch the COTs as they tend to be right and there are less hedges done in commodities from what I have seen than in the SP00s.
Bonds are great because they represent HUGE money and trade soley on FA though TA does work. The hard part of Bonds is speed of knowledge since the big boys have the best minds in the world on their side and get the info early not that they would have spies on the inside of these economic reports or anything. -gggg-
More reality from CBS....
CBS.Marketwatch Update 10/25/01 "This Nasty Little Bubble Awaits Pinprick"
Slimy Market Bubble Persists
'You provide pictures, we'll provide bull market'
By Thom Calandra, CBS MarketWatch
Last Update: 12:52 PM ET Oct. 25, 2001
SAN FRANCISCO (CBS.MW) - What we're learning this month looks like that battery-operated bunny: the bubble keeps bursting and bursting and bursting.
If you thought the second half of 2000 and most of this year were ugly, wait until October's inflated stock prices receive their well deserved pinprick.
Japan's Nikkei 225 Index took 12 years, starting in 1989, to decompress. It reached 39,000 or so and wound up falling below 10,000. In that span, there were plenty of 30 percent and 40 percent and 50 percent rallies. Call them retracements, dead-cat bounces, adjustments, corrections - who cares?
The Japan and Asia-oriented funds lived off those bounces for more than a decade. Investors made short-term scores, even as the Japanese economy deflated and the Japanese consumer went into hiding. No argument there.
This time around, in the good old USA, the mini-bubble is making an appearance, fed by government stimulus programs, the Federal Reserve's easy-money policies and a Wall Street penchant for hyping the beast. Oh, and deluded individuals who are boarding the October momentum train. Call it a 15 percent retracement in Nasdaq, a dead-cat bounce, a correction. I call it a bear trap, pure and simple.
The air-pocket has names like QLogic (QLGC: news, chart, profile), Applied Micro Circuits (AMCC: news, chart, profile), Surebeam Corp (SURE: news, chart, profile) and Cepheid (CPHD: news, chart, profile). Other names include Krispy Kreme Doughnuts (KKD: news, chart, profile) and P.F. Chang's China Bistro (PFCB: news, chart, profile) - these last two food and restaurant companies that are becoming a favorite of hard-nosed short-sellers who hope to get their just desserts in the coming crash.
The squibs of air being pumped into these securities isn't the fresh mountain air that swept through stock markets in 1998 and 1999. It doesn't have the tingle that comes with fistfuls of corporate profit and a booming economy.
This time around, at their depressed levels, securities of all shades are getting a whiff of the foul air that comes with stale hype and the beating of war drums. Hence the doubling and tripling of shares that once sold for $2 or $4 or $6.
If and when this last-gasp bubble pops, it will be mean and slimy - like an air pocket that belches its way into an oil slick on the Dead Sea. The folks who will hurt the most are the ones already in the stock-market poor house: individuals who don't have access to market-neutral and short-bias hedge funds.
There are 28 or so reasons why this stock market is an oil slick waiting to happen, as quantitative analyst and fund manager Cliff Asness at $1.3 billion AQR Capital in New York City points out. The price-earnings ratio of the Standard & Poor's 500 Index stands at 28, its richest valuation but for two brief spans of time. "Though of course there are 92 versions of earnings these days," says Asness, a frequent contributor to financial journals and a stock market historian.
One of those expensive-stocks spans was in the November 1999-March 2000 insanity, fed in part by the Federal Reserve's rush of Millennium Bug liquidity. The other came just before the October 1929 crash that marked the start of the Great Depression.
Asness, a fund manager with a sense of humor, is as mystified as anyone why investors are willing to pay such high prices for the stocks of companies that can't possibly recover their pre-2000 growth rates, at least not in the next year.
"I imagine the head of CNBC saying 'You provide the pictures, I'll provide the bull market,' '' he says.
The 72nd anniversary of the '29 crash is Oct. 28-29. That's this Sunday and Monday. Thank goodness for the fact that American markets don't trade on Sundays.
For more on the bear trap, see this from Thom Calandra's StockWatch.
Thom Calandra is Editor-in-Chief of CBS MarketWatch. His StockWatch will be on holiday from Friday Oct. 26 through Friday Nov. 2.
cbs.marketwatch.com |
