I'm calling it - The Top Is In

[S2007S]

Anytime the thought of an economic turn around is mentioned oil moves up, if this is the case by the time GDP gets to the 3-5% range and job rates start to decline oil could be back above 120, can the consumer handle this again, seems nothing has been put into place to prevent higher oil prices, every plan was tossed after oil went from 150 to 35. The worries are going to come back very soon.


Oil surged for a fifth day on Wednesday to a 2009 high above $75 a barrel, boosted by a weak dollar and optimism about a global economic rebound that will lead to higher energy demand.

 

[S2007S]

Quote from zboy2854A:

If you truly understood how economics worked, you'd know that it's impossible for the Fed and government to continue on the path they're on for "decades". Market forces will see to that.

I'm being sarcastic, you don't need to understand the economy anymore, it upside down and manipulated with trillions of dollars. All the fed has to do to prevent recessions every 10 years is take interest rates to 0%, create programs to save the consumer, drop the dollar and inject trillions of dollars into the system and like magic everything is back to normal. Welcome a new bull market and stronger economy.

 

[piggie2000]

s2007 you're getting a little carried away here. earnings overall still will be down 20% year over year and many stocks back to there 2007 peaks and earnings still 50% under. jpm used to earn $1.30 quarterly when it was the same priced stock as now back in 2007.mkts way overvalued and in a mania but will fall 15-20% soon

 

[S2007S]

Quote from piggie2000:

s2007 you're getting a little carried away here. earnings overall still will be down 20% year over year and many stocks back to there 2007 peaks and earnings still 50% under. jpm used to earn $1.30 quarterly when it was the same priced stock as now back in 2007.mkts way overvalued and in a mania but will fall 15-20% soon

I know earnings are down year over year but it doesn't matter much because "the markets are forward looking" as they say. Stocks are beating because of the low bar they have set for the companies, 75% of companies will exceed expectations this quarter. Maybe the second half of 2010 will be interesting to see if these companies come up with unique ways to make earnings besides cost cutting and job layoffs, that only works for 1 to 2 quarters.

 

[zboy2854A]

Quote from S2007S:

I'm being sarcastic, you don't need to understand the economy anymore, it upside down and manipulated with trillions of dollars. All the fed has to do to prevent recessions every 10 years is take interest rates to 0%, create programs to save the consumer, drop the dollar and inject trillions of dollars into the system and like magic everything is back to normal. Welcome a new bull market and stronger economy.

Nah, they can't do that on an indefinite loop, we're in the end stages, which is why we're seeing a parabolic move in the national debt, and we know how every parabolic bubble move ends--with a collapse. The only question that remains is how long and how far the bubble will go before it collapses.

 

[Ivanovich]

This is all a DGDF story. Once that is no longer "forever", this will change in a hurry.

 

[S2007S]

Quote from zboy2854A:

Nah, they can't do that on an indefinite loop, we're in the end stages, which is why we're seeing a parabolic move in the national debt, and we know how every parabolic bubble move ends--with a collapse. The only question that remains is how long and how far the bubble will go before it collapses.

The only way out of this credit crisis is creating another bubble which they aren't doing but have already done, the bubble is forming right now and its too late in my opinion to take any measures now to stop it from getting out of control. Anyone who believes this market is healthy is a fool. The market can run for another 5 years but when reality does kick in, which it always does, a major correction of 50% or more could be in the cards. Let them celebrate dow 10,000 for a third time in 10 years and let them feel disappointed when they have to celebrate it a 4th time sometime in the next 3 months or 3 years.

 

[S2007S]

 

[romik]

Maybe somebody ought to remind top callers what is the technical definition of a top. You seem to be yanking the same chain whenever price hits resistance a couple of times. That is not a technical top. Does anyone recall oil out of control climb? How many calls for oil top along the way? Lots. Just check the oil chart. Once you get price reacting to resistance then followed by support break only then it is registered as a technical top. Not Holy Grail but a damn better way to commit capital basing it on the weakness or even strength of others abandoning their positions. That's what I was waiting for, still waiting for.

 

[zboy2854A]

Quote from romik:

Maybe somebody ought to remind top callers what is the technical definition of a top. You seem to be yanking the same chain whenever price hits resistance a couple of times. That is not a technical top. Does anyone recall oil out of control climb? How many calls for oil top along the way? Lots. Just check the oil chart. Once you get price reacting to resistance then followed by support break only then it is registered as a technical top. Not Holy Grail but a damn better way to commit capital basing it on the weakness or even strength of others abandoning their positions. That's what I was waiting for, still waiting for.

Yep, bubbles eat resistances for breakfast, and we are firmly back into another bubble in equities. Technicals in this environment in particular are meaningless. Therefore, IMO there are only two reasonable ways to play the inevitable bursting of the bubble. One is to wait for the price action as you described. The other is to wait for a parabolic or vertical upward move and gradually enter into a short position on the way up using a ladder of orders. Of course in order to do this, one must be willing to take short term pain and have deep enough pockets to withstand the onslaught.