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I think the next bounce down to 7000 or below is another opportunity to buy if you can hold for a year or two. If you want to trade then sell on the upswing and pocket a few bucks.
I think the next bounce down to 7000 or below is another opportunity to buy if you can hold for a year or two. If you want to trade then sell on the upswing and pocket a few bucks.
But is the market going to drop by 1000 points or do we see it trading in a range for a while. What non-discounted bad news is there?
I think the next bounce down to 7000 or below is another opportunity to buy if you can hold for a year or two. If you want to trade then sell on the upswing and pocket a few bucks.
I'm thinking we haven't seen the last big drop either. Bottomline, nothing about the underlying fundamentals has changed. The banks are still screwed up, credit is tight, we're dumping money into two failed auto makers to prop up the unions, we are not developing our own energy resources, jobs are not being created, illegal aliens are receiving work permits, taxes will rise, a full 50% of the population will not be paying any taxes and living on government welfare, unemployment is still raising, Obama is paying dollar for dollar on the foreign owned CDSs while forcing Amerians investors to take pennys on the dollar. Obama and crew are using magican distraction techniques to draw attention away from what they are really doing. How else can we explain the Limbaugh event, the executive pay event and all the other weekly 'events' that dominate the news while in the background the congress is passing enormous spending bills with almost no news coverage. I could be wrong, but this all adds up to a lot more turmoil in the economy for years to come and that will be reflected in the markets.
However, we should never let a good crisis go to waste. While Obama is screwing over the country, there is money to be made trading the volitility! I have been trading (for myself) on volitility for about a year. Oildog turned me on to FAS and I have made some decent money with it over the past month or so. When a security is bouncing +/- 30-40% a day, that's more return than can be expected in 5 years of a 'normal' market! I don't think it will be necessary to hold for a year or two. If the market drops to 7000 on Monday, that means I buy back the security for 40% less than I sold it for last Friday! By Wednesday next week they may leap upwards 40% based on some bogus event at which time I sell them again. Basically, I have been selling in the rallies and buying in the slumps. I'm not greedy either. If I can flip a security for 15-20% profit in two days, I am all over it. This is the same basic techniques that Oildog uses.
In a taxable account, capital gains tax will eat you alive and the net return may not be worth the effort. This is best done in a Roth account to keep the gains tax free. I try to keep my trading cost down to 2-3% or less since they are not deductable. In a trad IRA, the gains are taxable at some point and the trading costs are also not deductable. I look forward to Monday!!!!
I asked this question in March 2008! We went around the table for a week trying to identify possible threats. Nothing really stood out as being highly likely :-)
New News: For the first time in a long time, long securities are showing promise. Netflix, Inc (NFLX), a cust discretionary stock, is up 98% in 6 months. The various bond funds still dominate the top fifty list but for the first time in about 9 months, only two bear funds remain in the top fifty. Other long securities doing very well are Monteagle Growth (MIIFX), Home Depot (HD), Fidelity Retailing (FSRPX), Ford Motor (F) and PowerShares Retail (PMR). The Volatility Index (.VIX) is moving down the list which is a good thing. For reference, Vanguard 500 Index (VFINX) and the S&P 500 Index (.GSPC) are located at position 760 and 763 respectively. For bottomfeeders/potential bargains, look at the REITs. Ultra Real Estate (URE), at position 1079, has gained 15% over the past week and up 6% for the past 4 weeks. With a Beta of 1.5 to the DJ REIT Index (.DJR), this is a volatile security. Disclosure: I have a position in URE, but none of the others mentioned.
For those who do market timing this may indicate a opportunity to start dollar cost averaging some of the cash back into the market. Consider a Customer Discretionary sector ETF for starters. I think we can expect continued volatility. Market swings of 200+/- daily seems to be the norm now. And we may see 500+/- weekly swings, but it appears the overall trend is upwards. Seeing .GSPC posting positive annualized returns in the 2, 3, and 4 month periods should confirm the trend. We will see.
I think we've just seen a bear market rally, right on schedule, circa 1930. After a grim 1929, the market celebrated the "end" of that market crash and recession by rebounding almost 40%. After everybody hopped back in, the market quickly retreated and made a lower low, as the recession became the Great Depression. People were wiped out all over again.
Traders have been waiting for this rally and have speculated aggressively, driving the market way up on no news. I’ve traded right along with them and recouped a lot of my losses. Now I’m looking for exit points and banking profits before earnings season puts a damper on the party. A lot of nothing about the G-20, automakers and mark-to-market is no match for a lot of nothing reported by companies who see little reason to party just yet.
While I don't buy into the Great Depression II, I think we have more downside before we find a bottom. If I'm wrong, I've lost opportunities, not capital. I'd rather miss the bottom than hop in too soon. JMO.
I too think we will see the market drop as quarterly earnings come out. But I have no idea by how much. There are clearly going to be opportunities to buy and hold especially in financial services where share prices remain depressed. A buy and hold strategy should be looking for value where the book value of a stock is higher than its share price and where the fundamentals are strong.
I agree with recent posts. I dont expect great news this earnings season, and in fact another round of layoffs will likely happen. I think the recent rally may fade soon.
I'm trying to be positive and I just don't think it will go way down, down again, yes, but not below 6000 and certainly not 5000 like someone posted. Just my thought, I didn't change anything, lost some but now I'm gaining some back. Not a big deal, I always tend to ride things out instead of going into a panic.
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