Crash 40% Down, In Two Weeks

[Chood]

Quote from Chood:

Thus far, from two Tuesdays ago, I have legged in short positions in these equity spaces: mining, gaming (Vegas exposure versus other), and pharma. Last puzzle pieces to be added this week, in financial services. No retail, auto, energy, or transportation.

I’d be interested to hear from anyone else who is taking short positions in equities, particularly the reasons for the positions. I’ll give you mine.

Some early confirmation of this morning's post, above, in today's price action in financials. Watch tonight's action in mining shares BHP and Rio Tinto.

Oh yea, add this post mortem on today's action. a startling bit of timing I might add:

June 25 (Bloomberg) -- Financial shares tumbled on concern losses tied to subprime mortgages will deepen, extending the U.S. stock market's worst weekly decline since March.

. . . .

Financial shares were the biggest drag on the S&P 500, losing 0.6 percent as a group and accounting for more than one- third of the retreat.

 

[Digs]

I encourage you to subscribe to TheChartStore.com in the short term. ( I am not the provider, just a happy subscriber).

My advertising plug of "Crash in two weeks" was very ambitious, however Aug, Sept and Oct 2007 should be very interesting this year.

Things even may be delayed into 2008, but whenever the market has stayed up for so long without a 10% correction the final result has been a correction of over 20% EVERY TIME. I refer you to the latest weekly blog (June 23rd) in TheChartStore.com for evidence.

 

[blackbook]

bring it on!

 

[HolyGrail]

Quote from dhpar:

is this your Holy Grail? lol - well I call it a cheap crap.

Market changes all the time and it is completely different between '95 and today. Only lazy people who do not adapt do not want to see it.
It is true as you state that the basic human psychology is relatively simple and likely not changing much. But the reason we rule the planet is not only because we fear and are greedy but because we use our brain! That somehow completely dropped from your magical formula.

To be consistent on a daily/weekly/whatever basis you can't be calling for black swans all the time - and still many people are being crushed by calling for equity crash, high yields, $30 crude etc for past several years....

"This time it is going to be different" is a dangerous statement which is often laughed at but...a trader should have the courage to take his shots.

There is nothing "magical" about human psychology. Keep convincing yourself that it IS different this time. What you call courage, I call stupidity.

 

[dhpar]

no - it is not different this time - it is exactly the same, i.e. smart people will make money while majority will just hold the bag.
but you just confirmed to me that you think in stereotypes...

 

[HolyGrail]

Quote from dhpar:

but you just confirmed to me that you think in stereotypes...

LMAO, what in the world does that mean? I said human psychology does not change, and out of that you conclude I think in sterotypes? That's a pretty big stretch don't you think? I never said that the world doesn't change, just that the reactions of the human brain to "herd mentality" have remained the same since our existence.

 

[Chood]

Quote from dhpar:

. . . it is not different this time - it is exactly the same, i.e. smart people will make money while majority will just hold the bag...

BUMPED due to accuracy.

 

[Chood]

Giving credit where credit is due, here's Mr. Forbes' spot-on reporting of the sheep shearing -- yesterday's & today's opening act in particular:

There was a time when Stephen Schwarzman, chief executive of Blackstone Group, would globe-trot, lecturing people on the benefits of running a privately held firm. At one point, the financier dismissed the public markets as "overrated."

He may have had a point. After furious bidding to get hold of Blackstone's initial public offering last week, investors could have picked up the shares on Tuesday for less than the company sold them for.

Quote from Chood:

Geez, thanks for straightening me out on that one. Guess I've been confused all along, mistaking this Blackstone thing for a correlative and signal for more general price action (i.e., an index), as in this post of mine February this year:

"How about some of the private equity deals being done today? How do you imagine those huge investments will be cashed out in the end? Through IPOs with gargantuan floats, that's how. Who will be the float subscribers? Herds of sheeple fearful for their retirement, or just plain fearful or giddy, believing the Pied Pipers of stock land."

 

[Nofear777]

Quote from frank grimes:

If there is risk in stocks, doesn't logic follow that there is indeed risk in the indexes?

No. It does not follow.

 

[dhpar]

Quote from HolyGrail:

LMAO, what in the world does that mean? I said human psychology does not change, and out of that you conclude I think in stereotypes? That's a pretty big stretch don't you think? I never said that the world doesn't change, just that the reactions of the human brain to "herd mentality" have remained the same since our existence.

really? let's roll back a bit...

rateesquad said:
quote "For that matter why does anyone compare 95 to now....
Everything has changed.....remember a lot more people trade now then before....since 2000...the charts patterns are not the same...well ok some of it...but you cant compare 20th century to the 21st it is just ludicrous." end of quote

and you replied:
quote The market never changes. .It is a reflection of human psychology and human psychology does not change!!!
end of quote

I argued with the bold section - check the remaining posts for yourself.

so don't shit around here now with psychology and that you never said that the world does not change.
this is becoming silly anyway - I do not know why I argue with you.

howgh