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4 months ago, analysts were predicting Russell 2000 forward operating earnings to be $55 and the index was at 1050. So far so good. Today, analysts are predicting forward operating earnings to be $40 and index is at 1130. So earnings estimate are down 27% and price is up by 7%. This is...

Russell 2000 trailing PE and forward PE are at all time high and is in a bubble. I will cover my short position in Russell 2000 when I see them reasonably valued close to average. The fact that S&P is reasonably valued does not mean that other indices are reasonably valued. It is exactly the...

The bubble is there but not visible because there has been earnings growth justifying current PE ratio. But earnings growth has been due to share buyback, low interest on debt, layoffs. There is no revenue growth. The only visible bubble is in Russell 2000. Earnings are actually declining...

It simply means they are not going to invest in US treasuries any more. So yield on longer term treasuries will go up. It is not going to happen in a day but it is very significant. 10 year yield can easily rise up to 4.5% within a few months.

There is nothing left to buy at reasonable price. That does not mean it cant go higher. Revenues are constant, labor costs are rising => earnings will decline and PE ratios will compress. Right now it is a momentum trade and we know how it ends.

http://www.bloomberg.com/news/2013-11-20/pboc-says-no-longer-in-china-s-favor-to-boost-record-reserves.html China no longer interested in buying dollar. It will get ugly.

Remember summer of 2011, small cap tanked 30% in couple of months.

Also, Russell 2000 is way way overvalued. I am short IWM. It is a matter of time before gravity kicks in. http://online.wsj.com/mdc/public/page/2_3021-peyield.html

I can't expect forward PE above 20 sustainable even with low interest rates. In fact 15 is more reasonable. Just based upon this fact, Russell 2000 is poised to fall around 30% in next few months.

http://online.wsj.com/mdc/public/page/2_3021-peyield.html Wall Street Journal is showing Russell 2000 trailing PE over 75 and forward PE above 25. 1. Is this correct or bad calculations ? 2. If this is correct, how can FED deny that we are not in a bubble (at least Russell 2000) ?

It was a bad feeling when i lost $80K. I wouldn't say it was devastating because i still had a good job. I am good in playing with ER2 (now TF). The mistake i made was that i was attracted to QM because of volatility. I am a counter trend player. Earlier i was shorting every rally and buying...

You can definitely make it $100k but i think you have inadequate capital. Trading is fun though. I started with $100k. Within a year, i was down to $20k. After 3 years, i am back to $125k.

http://money.howstuffworks.com/bank5.htm

This is my suggestion on how to make moeny. We know that most of the time we lose money by making rational decisions and end up losing. How about doing exactly opposite of that. Buy when you would sell, Sell when you would buy. That should make some good money.

What is the ideal risk to reward ratio successful traders are using. When i use 1:2, market gives me 1:3 but i end up taking 1:2. Then next time i use 1:3, market gives me only 1:2 and i end up taking a loss.

I shorted 1 contract of ZB this morning at 114 22/32 and covered at 114 12/32 for a profit of 300 dollars.

I guess there will be no pullback but it will be a big drop of more than 50 points on S&P, 500 points on DOW, 100 points on Nasdaq in next few days. I won't buy unless the above happens.

I expected the market to go up but also expected some pull backs along the way. Why pull backs are missing this time ?