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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: MJ who wrote (4807)	8/5/2010 8:58:38 PM
From: Walkingshadow	1 Recommendation Read Replies (1) \| Respond to of 4814

Hi MJ, I can understand the doom and gloom. Medium-term and long-term, I see nothing but bad news out there. But first, we have to get everybody really bullish, and the only way to do that is to rally rally rally. Personally, I think the "recovery" is a statistical and accounting anomaly related to the $7 trillion+ influx of funds from various stimulus packages. Once the effects of that wear off (and that has been happening), then we are right back where we started. People will call that a "double-dip" recession or a second recession or whatever, but a recession by any other name is still a recession. Some of the doom and gloom that will one day come home to roost, and won't go away: 1) US corporations are sitting on record piles of cash (about $2 trillion). But this is highly misleading, since they also have record debt ($7 trillion). So, no surprise they are in no rush to create jobs, since they know they can't really afford them. 2) Wall Street financial firms are leveraged MORE now than they were in 2007 prior to the credit meltdown. The recent reform legislation does exactly nothing to prevent a repeat of 2008. 3) Residential real estate markets are poised for another drop, with a tsunami of foreclosures on the way. The rate of foreclosures is not slowing, but instead is accelerating. 4) Commercial real estate markets are next on the agenda, and have already shown signs of impeding bad (or worse) times. 5) No jobs are being created, which is typical of ongoing recession (which I believe we are in fact in, once you remove the politically-motivated accounting smoke and mirrors). 6) Jobless people don't consume much products, and they don't buy houses, and they can't pay for the houses they are in. I don't know why this is so hard to understand. This isn't rocket science. 7) ECRI indexes now predict recession. 8) One of the primary causes of this recession has been colossal debt (government, corporate, and personal). That has not gotten better (except personal), and in fact has gotten markedly worse. That oughta do it. So why am I long? Because markets are nothing if not irrational. As the old axiom states, the markets can stay irrational much longer than you can stay solvent. But more to the point, all indicators I see point to continuing rally. I don't use economic or macroeconomic indicators at all, since markets often move completely contrary to such things. I also don't use news. I think news is at best non-contributory, and far more often, directly misleading. I anticipate the following: markets will continue to rally until people get a lot more bullish. Just about the time that happens, then we'll see things turn really vicious, and the markets will enter a definite long-term downtrend that will see the indexes lose at least 50% of their current value. When will this begin? I can't say for sure, but I think we are on the last leg of the rally. I suspect we'll be heading south in a hurry by October or November or so. So, as I see this rally lose steam, I will be shifting my long positions to short positions. Already, several long positions have hit their sell limit targets and I am out, but I have not flipped these short just yet. TMD