Posted on 10/20/2009 6:38:23 PM PDT by blam
A Big, Fat Stock Market Selloff
By Eric Fry
10/20/09 Laguna Beach, California – Stocks prices are very, very high… Our contrarian colleagues over at The 5-Minute Forecast continuously lament…which means that the collective anxiety of investors is very, very low. Our colleagues don’t mind that a rising stock market is adding trillions of dollars to the asset side of household balance sheets. That’s good news. But the worrisome part is that a falling stock market could erase those trillions from the ledger just as quickly as they first appeared. And as our colleagues correctly point out, rising share prices, coincident with falling investor anxiety, usually adds up to a big, fat stock market selloff…
[snip]
Before the end of Oct we will see a major correction. I am completely in cash now.
I am wondering if it happens before Halloween. The Dow is struggling to hold 10,000. I think it’s failure to hold 10,000 and the resistance it keeps hitting there will be a catalyst.
This is what I am thinking. It may go before the end of the month. We closed at 10.041.48.
Just after 12 noon we dipped below 10,000 - twice.
Well there’s never been a black Wednesday, so maybe tomorrow
Yup. See here.
October ALWAYS has a surprise, and the 10k mark seems like solid resistance, so tomorrow could be the day, but I am thinking early to mid next week.
All the stocks in my portfolio continue to pay dividends. Some are paying ten or fifteen percent on my original investment.
Now why should I sell?
EVERYONE wants a sell off or retracement to take the speculators out of the price.
Gold is in the had of the speculators. Move the dollar to 76 and you will see 50 points drop from spot gold in the same day.
Oil is in the hand of the speculators. Break 80 tomorrow with the dollar down and gold up and it is an easy long play. For no other reason than that is how things work when the markets are in the hands of speculators and not prices.
Earnings crushed today and the market was down. Why? Read above and look at today’s charts.
Why put equities into cash? P&G pays dividends selling essentials. Dollar pays nothing sells nothing and is aproaching Trinity.
I don't think so. Instability with high volumes precedes crashes. I don't see that happening this season. I'm in commodities, especially gold and even gold miners.
Nope. Don't see it.
Life (and theories thereof) would be so much easier if it did, but...
China is buying up oil on the open market, and the economy in India is back to normal, with people trading in bikes and scooters for cars. And it’s going to be a cold winter....
That’s your demand.
I hope your commodities had copper (up 180%) and not just gold (15%).
The largest wheat buyer for hedging buys something like 200k contracts on the commodities market. Yet 20 million are traded. What does that tell you?
Gold bugs should talk to the oil bugs that were long at $140. I’m a big Harry Dent fan, so I would never poo-poo a commodities bubble trader at this time. I’m just saying, it’s a trade, not an investment.
What drove it to $140+ last year? Consumer demand, holiday travel, cold...summer?
It’s a dollar trade to a point. After that the speculators take over and get burned or win just like anyone else.
If you are an Options trader, taking a quick short position could be a cheap way to make big bucks, with little downside.
Yesterday I executed a SELL order and cashed out everything. I regained about 40% above what the low point was. That’s good enough for me considering I improved upon my original investments, although in deflated dollar value, the gains are less in 2009 dollars compared to the 2000-2006 dollars I put in. But I see another down cycle because the economy is not as rosy as government propaganda is trying to lead people to believe.
No greed here. Just good fiscal planning with cash opportunity’s waiting.
You will need long stops for this play. Like I said, everyone expects it, but that was 1000 points ago for fibs and E-Waves.
Let it turn on its own. Never try to pick a top or a bottom.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.