Mark Cook: 29% correction in March 2007

here is a funny story on my meeting with me cook a few yrs ago

( I might have told it before here but forgot - am getting on in the yrs !)

he told folks in the room with me about a "monkey" (?) trade in the bonds ... how to do it and make money

well to be honest ... maybe I should have hired a monkey
to make the trades as whenever I tried to do it ... I lost money
on average ...

no disrepect to mr cook here ... only pointing out how hard it can be to follow someone else's rules without taking into account
your own personality and fears on taking a trade sometimes
 
.the foreign money will abandon this market in 2007.....and that is a considerable source of funds...."

WOW what a DOLT!

Well, virtually all the new money earmarked for equities over the last two years went to emerging markets. Maybe investors will discover that the combination of upside potential coupled with an economy that has less risk than those that have become fan favorites could result in a redirection of funds.It's time for investors to stop saying "Not in my backyard" and begin to see the opportunities right under their noses. - Charles Payne.

I've been making this point for a few days to my peeps- I might add that at the recent World Money Show in Orlando the final recommendation for investors was put 65% of your assets global!

What popped is not our market it's THEIR markets!
No more Russia, no more Brazil, no more China, no more Central European nononsense, no more Saudi Arabia nonsense, Dubai ridiculousness, no more India, no more Turkey, no more, no more, no more. As we languished for 5 years going nowhere Europe flourished with our weak dollar investing everywhere but here made sense....

Well a good jolt of International meltdown fear is just what the Dr. ordered to keep OUR money at home. Let the foreign money dance away-they will still keep buying our bonds and that's all that matters.

IRONICALLY folks when we look back and ask ourselves what jump started the next leg of the great Bull -- it may just turn out to be the China scare.
 
<i>"IRONICALLY folks when we look back and ask ourselves what jump started the next leg of the great Bull -- it may just turn out to be the China scare"</i>

That may very well be true... if you don't expect the bottom to come from current levels.

She's going lower, for sure.
 
Yen carry trade 80% unwound.
China marches in line until the olympics> Gov will buy shares if they have to.

So it's really about OUR economy when the dust settles. I see a SUPER STRONG rally right now.
Relief combined with Fed speak plus just eeking out a double digit earnings picture for S&P 500.

The shrinking share story on our exchanges will be larger and larger a piece of the overall investment theme as new money departs China and other places and comes here. Stocks will fly. Buybacks increase.
We still have hardly ANY IPO's coming through. No new paper = lots of upside for what's out there. M&A continues apace. Private equity runs amuck. All of this will boil up at some point and implode- maybe a classic October my early work points to that. The other scenario is the inventory build up situation and the lack of reinvestment by technology companies in themselves'
it's starting to freak me out I think we are still at the point where they can squeeze another penny or two out of the cost side but we're very tight here folks-- productivity has leveled out and there's a real danger that a whole swath of tech companies will guide down next qtr. So there is an argument to be made that the lower part comes sooner not later but in any event it will be at least one month out.
 
Quote from stonedinvestor:

Yen carry trade 80% unwound.
More...

Yes the Yen has been my best trade ever since l got into this business. :D My question is if these big funds hire all those Yale, Cambridge, Havard , MIT and Oxford brilliant PhDs why do they still all act in identical fashion :confused: , even worse they start to run in same direction so much so for Ivy League educ ?
 
As much as they hate to admit it-- it's all a big game of follow the leader with the leaders disguising their trades until they want them known so they can get out.
These brilliant minds are then left holding the bag and hitting an extra zero now and then and f*ing up everything for all of us.
 
Quote from stonedinvestor:
Yen carry trade 80% unwound.
China marches in line until the olympics> Gov will buy shares if they have to.
So it's really about OUR economy when the dust settles. I see a SUPER STRONG rally right now.
Relief combined with Fed speak plus just eeking out a double digit earnings picture for S&P 500.
The shrinking share story on our exchanges will be larger and larger a piece of the overall investment theme as new money departs China and other places and comes here. Stocks will fly. Buybacks increase.
We still have hardly ANY IPO's coming through. No new paper = lots of upside for what's out there. M&A continues apace. Private equity runs amuck. All of this will boil up at some point and implode- maybe a classic October my early work points to that. The other scenario is the inventory build up situation and the lack of reinvestment by technology companies in themselves'
it's starting to freak me out I think we are still at the point where they can squeeze another penny or two out of the cost side but we're very tight here folks-- productivity has leveled out and there's a real danger that a whole swath of tech companies will guide down next qtr. So there is an argument to be made that the lower part comes sooner not later but in any event it will be at least one month out.
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This is good thinking and I concur. Big rebound, followed by more downside, but much slower this time....slow and agonizing for the bulls.
Perfect strat: Buy calls, sell after bounce, then sell credit spreads on calls....and just keep selling 'em.
 
Quote from a529612:

The New York Stock Exchange announced in March of 2000 that margin debt was at 278.5 billion dollars. The severity of the decline was felt like a tidal wave by mid April of 2000. The New York Stock Exchange announced in February 2007 that the margin debt was an all-time record 285.6 billion dollars. Is another tidal wave already speeding toward the shore line? I think so!

http://www.markdcook.com/index.cfm?page=Commentary-10:-2/23/2007
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Too bad the margin rules change in April of this year to a much more "Portfolio Risk" basis. Guess Cook didn't write about that, did he?

http://www.optionetics.com/market/articles/16454

Friday's close now points to the first fib retracement level of 1366 SPX.
I'll be a major buyer there.

The market is cheap.
Liquidity is still generous.
Fed on hold.

The only thing WORRISOME about the last rally phase was the lack of breadth. In any event, it's gonna be a great TRADING market, back and forth.

Gotta be flexible.
Strong opinions either way will not make you profitable.
JUST TRADE THE TAPE!
 

The only thing WORRISOME about the last rally phase was the lack of breadth
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Uh...yeah, so don't expect a new all-time high anytime soon...and if you check some ET posts about 1 month ago, someone remarked about absolutely HUGE short bets in the S&P Futures market. That was the "smart money"....Lehman, G/S, M/S, etc.

The bounce will sooth a lot of nerves and keep the lemmings into their existing long positions. It's the NEXT WAVE down that will cause the panic. So...I agree, no panic for now...play the bounce and keep your finger on the sell trigger when needed. We may go back into mini-euphoria and goldilocks again.....but not likely.

This market has changed....and very fast too...as Art Cashin said so prescently on Friday "This market's had a heart attack".
What was it...800 billion dollars of equity "lost" in the past week....I think we may see a bit of an effect on the economy. Wait till the layoffs begin - major household pain coming right up....with massive, massive government debt on the way. Next up: lower interest rates, followed by hyperinflation....Argentina-Here-We-Come !
 
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