“This market is having a TOUGH time pushing through the highs... Third time we’ve been here. The previous two resulted in BIG corrections.
“Dollar is strengthening against other currencies... Gold & Silver are in LONG TERM declines, VIX is increasing.... we’re at a turning point, but... Which way??”
Please take my comments constructively. Beware of what your mind is telling you...in this case. I myself don’t agree with any of those stmts, except the VIX, which is pretty obvious, but when the VIX is ultra depressed, down moves generate spikes and those do not necessarily come off. If you are looking for a moment to buy, you WANT a high-VIX, high-fear moment. I believe that if you buy the close on any day the SP is down at least 15 pts, preferably 20, you’ll win 85% of the time. YOU SAW THIS the previous big-down day when the last 30-40 of DJIA dump occurred at the very end of the day. That capitulative moment, when stuff is being dumped over margin calls and raw fear, that is when you buy. This market? Feh. No fear, not on an historical basis.
“I just don’t know. I’m sitting at 50% cash, down from 100% invested a month ago. I’ve gotta see S&P above 1550 for awhile before I believe we can move higher from here.”
OK.
“May take an SDS position in the next week or two, if we’re still stuck here and no resolution from Washington..
Do NOT do this, please, trust me, even though you don’t know me. You will regret it. Please do not even think of SDS as a “position”. SDS and other doubles erode viciously, and folks who buy them as turbo-shorts get hosed, badly. The only way you make money on these doubles is if you happen to catch a three day move where the market moves all those days in your favor, short or long. Since the market NEVER moves three days red in a row any more, I believe you cannot own this. Please read up on how the mathematics of these doubles will grind your account into dirt. The maximum time you can own these is one week and if it hasn’t worked in that time, sell it with no tears because you were wrong.
Anyway, I’m just reacting to a few of your comments which are every bit as valid as my opinions, but watch it with those double etfs. If you want to short the market, short SSO, then, the horrible erosion would work in your favor. But that is also problematical because depending on your broker it goes in and out of hard-to-borrow a lot and you may be forcibly bought in. I would call these fairly sophisticated pro trading tools and amateurs playing with them usually pay for the education. Do not do.
I respectfully disagree. First look at the chart on 2X or 3X short. Ain't pretty is it? Top left to bottom right. But I have made money on these. How? The maximum time you can hold these is hours. maybe a couple of days. I will sometimes buy on Friday afternoon to hold until Monday morning if "news" is expected. So you can hold it . . . like radioactive Kryptonite. Sell it if it starts to tank. But sometimes the market starts to tank and you have to strike quick to get in and quicker to get out.
Thanks... I will. I certainly do NOT consider myself an expert investor.. far from it. I'm just a somewhat economically savvy engineer, trying to maintain a little something for retirement in 10 years...
That said, I do like to get "facts" correct. I suppose we could quibble about the meaning of "long term"... but, Gold is at the same level it was 18 months ago.. and, has been declining pretty steadily for the past 5 months.... that seem to be a trend to me.
Silver is in an even longer decline... at same price it was 26 months ago, and has been declining since it's blow-off top in early 2011... nearly two years ago.
Meanwhile, the US Dollar Index has been trending up, also since mid 2011.. and has moved up faster in the past month.
10 yr Bond Yields had been increasing since around July, but.. have moved down in the past few weeks.... and, are still below 2%. That's not a very bullish indication to me? So.... why do you disagree with my other statements?? Oh.. and yes, as the market has approached this 14,100 level, it's sputtering and becoming more volatile... and, DID INDEED have major corrections after hitting these levels last time...
So... really...where was I incorrect? Is it interpretation? Or, are my facts wrong?
As for SDS... I have used it a few times in the past year or two, as a hedge when I get nervous, and don't want (or can't) move out of mutual funds. I guess I've been lucky, because.. I typically haven't held it more than a week or two... just at times when I'm unsure of which way we're going... like now. But, I'm not bearish enough, yet, to do it... just was thinking about. I'll look for another way.
Greatly appreciate your input...
No fear?? HAH! I have TONS of it. I can't... WON'T go through 2008 again... one sign of not moving through this level, and, I'm burying money in the back yard again... :-)