Exactly, alot of these talking heads on cnbc continue to hype the market up as if nothing can stop it. I remember back in the 1998, 1999 and 2000 when the markets were running higher and higher, many were calling for the nasdaq to go to 10,000, at the time it was certain that anything was possible, but when you look back and see what happened you think of the people who continue to say buy the dips, yes it may work in the short time span of say 12-18 months, but eventually buying the dips wont work, especially when the bear comes to wallstreet and the market head for there first 10% correction in over 5 years.
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Big market correction about to occur
- Thread starter michaelscott
- Start date
Exactly, alot of these talking heads on cnbc continue to hype the market up as if nothing can stop it. I remember back in the 1998, 1999 and 2000 when the markets were running higher and higher, many were calling for the nasdaq to go to 10,000, at the time it was certain that anything was possible, but when you look back and see what happened you think of the people who continue to say buy the dips, yes it may work in the short time span of say 12-18 months, but eventually buying the dips wont work, especially when the bear comes to wallstreet and the market head for there first 10% correction in over 5 years.
Quote from michaelscott:
The analysis is simple.
- The SPX comprises about 75% of the "total market".
- An upwardly trending TNX is never a positive for the SPX.
- An upwardly trending WTIC is never a positive for the SPX except for the oil-related type companies on the index.
- Breadth is narrow and only a few choice stocks seem to be strong. If anything happens to those few stocks, then the index will become much much weaker.
- The chart is setting itself up for a breakdown. The NDX and COMPQ are the only charts that appear bullish while the rest appear to be making lower highs and lower lows.
Please show everyone WHERE the chart of the SPX is making LOWER LOWS???
Corrections come in many different sizes, shapes and colors.
Im not convinced until the price breaks through the old highs set in June THEN, just maybe, THEN I will give in. Now Im talking about the SPX which represents 75% of the total market. There are other segments of the market that are very bullish indeed like the NDX. As long as the price refuses to go above the old June high then I cant give it my blessing.
In my retirement accounts, I am 35% in cash and the rest is in Growth type mutual funds like the Vanguard Primecap. Sorry, I dont trade in my retirement stuff. Let the experts do that.
Im not convinced until the price breaks through the old highs set in June THEN, just maybe, THEN I will give in. Now Im talking about the SPX which represents 75% of the total market. There are other segments of the market that are very bullish indeed like the NDX. As long as the price refuses to go above the old June high then I cant give it my blessing.
In my retirement accounts, I am 35% in cash and the rest is in Growth type mutual funds like the Vanguard Primecap. Sorry, I dont trade in my retirement stuff. Let the experts do that.
If you're looking to make predictions like this, you've gotta look longer term.
On a weekly basis, the S&P is above its 10 week, 30 week, and 52 week MA's. The last few weeks have seen a bit of consolidation, but that's it.
Based purely on a linear regression it could go to 1640 before beginning to get into bubble territory.
A crack could of course happen at any time. I hate to say it, but it's true: it would be a dip to be bought.
I distrusted the models I use to do this kind of thing back in 1990, when Saddam invaded Kuwait and the market tanked bigtime. I lived to regret that when we rolled him up in 1991 and the markets shot higher. That was the ultimate buyable dip.
They told me to get out in 1999, and having learned my lesson, I trusted them and got out. Because of that, I lived to trade another day.
They're not screaming sell now like they did that year.
I do see signs that we could get a crack: gold stocks had a very good week, the 10 year yield is still rising, and I've been forced out of a few sectors in my long-term account by my models, which is never a good sign.
But overall, if we get another crack like the one in 1990, I'll be buying in that long-term account with the cash I raised selling those sectors.
On a weekly basis, the S&P is above its 10 week, 30 week, and 52 week MA's. The last few weeks have seen a bit of consolidation, but that's it.
Based purely on a linear regression it could go to 1640 before beginning to get into bubble territory.
A crack could of course happen at any time. I hate to say it, but it's true: it would be a dip to be bought.
I distrusted the models I use to do this kind of thing back in 1990, when Saddam invaded Kuwait and the market tanked bigtime. I lived to regret that when we rolled him up in 1991 and the markets shot higher. That was the ultimate buyable dip.
They told me to get out in 1999, and having learned my lesson, I trusted them and got out. Because of that, I lived to trade another day.
They're not screaming sell now like they did that year.
I do see signs that we could get a crack: gold stocks had a very good week, the 10 year yield is still rising, and I've been forced out of a few sectors in my long-term account by my models, which is never a good sign.
But overall, if we get another crack like the one in 1990, I'll be buying in that long-term account with the cash I raised selling those sectors.
Quote from michaelscott:
One note I want to make about the NDX is that it has always comprised mostly growth stocks. If you look at the all data chart then you can see how a growing economy can suddenly shoot that index up to amazing levels. However, if the economy isnt growing then that index can tank very fast and with short notice.
then, concisely, explain that the high-beta end of the speccy is leading the way at the END of a stong upward period and not the beginning ..............or are we really at an end of anything? more likely a lower degree phase........but please..........can we dispense with cliff-hanging speak ?