Anyone else predict a larger correction coming?
- Thread starter JBahn
- Start date
We go up as long as the easy money keeps coming, or maybe it stops for "sell in May".
As soon as something triggers people and funds to reduce debt levels, the markets will turn south. You have both the "carry trade" money, Private Equity debt financed buyouts, and record margin debt from hedge funds and retail all out there pushing the market higher. Take some of that away and there is a problem.
Example: When the yen went up, we had a 500 point down day because the funds borrowing yen to invest in world wide markets didn't want to need to pay back more expensive yen, so they sold whatever they could, including even gold to reduce debt. IMO, if the yen were to start getting stronger again, the funds having seen that relationship last time will sell to reduce debt sooner next time to avoid having to sell at a lower price later.
Note, I'm not short, nor am I predicting a big correction will occur Monday or anything, just saying I think when it does happen, I think it will be caused by something that reduces debt and liquidity like that.
As soon as something triggers people and funds to reduce debt levels, the markets will turn south. You have both the "carry trade" money, Private Equity debt financed buyouts, and record margin debt from hedge funds and retail all out there pushing the market higher. Take some of that away and there is a problem.
Example: When the yen went up, we had a 500 point down day because the funds borrowing yen to invest in world wide markets didn't want to need to pay back more expensive yen, so they sold whatever they could, including even gold to reduce debt. IMO, if the yen were to start getting stronger again, the funds having seen that relationship last time will sell to reduce debt sooner next time to avoid having to sell at a lower price later.
Note, I'm not short, nor am I predicting a big correction will occur Monday or anything, just saying I think when it does happen, I think it will be caused by something that reduces debt and liquidity like that.
i think we're at a very dangerous time . never in my 40 years in the market can i remember a more complacent non fear time. every single dip has been bought with almost a surreal confidence. so many events and bad news are almost laughed at with a " ha ha you can't hurt" me by the longs. 5 weeks ago we had a few days of fear as the yen went wild as the carry trade melted and the yen made it all back. the reason i see an all out panic at some pt in the near future is when you go this long with a no risk environment then the shock of a real fall hits the market and it panics
Yep I think this guy is expecting a drop soon.
http://www.financialsense.com/fsu/editorials/cherniawski/2007/0413.html
http://www.financialsense.com/fsu/editorials/cherniawski/2007/0413.html
1995 to early 2000 was more dangerous. During that time, there were much larger declines that were followed by surges in stock prices, and the big-down-day-followed-by-big-up-week cycle happened far more often than today. No matter the bad news, people thought the markets would overcome -- and they did for many years. Remember Greenspan's immortal words "irrational exuberance"? He coined it in 97.
The current market is complacent + slightly bullish, but a wild bull market ala 90s is more dangerous.
sell off every may-july yearly cycle, dow will be below 12,000 sometime between that period.
you might observe things and think the market might go south
but most probably you will be proven wrong.
it seems to be very very difficult to predict when the market is going to go.
so always be prepared I would say: anybody really doing that or will you be going down with the rest of us
but most probably you will be proven wrong.
it seems to be very very difficult to predict when the market is going to go.
so always be prepared I would say: anybody really doing that or will you be going down with the rest of us