Market In Confirmed Rally Mode: Investors Business Daily

H

HedgefundTrader2

MARKET IN CONFIRMED RALLY MODE: INVESTORS BUSINESS DAILY

Thursday March 20, 2008 was the follow through day after 8 sessions from the rally attempt in the market according to Investors Business Daily.

Yep! Bulls are back, but never turn your back to the ocean, cause the waves will hit you hard. Keep a watchful eye on sell offs that are life and blood of these vampires, vultures and shorts circling above your head....

Buy 1/2 s many shares as you would and scale up as the stock proves its worth to you. Let the market prove it to you and show you a nickle or quarter or dollar in profits. Be quick to sell out if need be before these vultures get on the kill and never ever let a stock getaway below your buy point. The money you did not make is money you did not lose, you can try another moment, an other hour, another day and another opportunity and another set up.

Be wary and cautious cause the bears are looking for meat on the bones, these bears are hungry for a nickel off your backs. Seen too many red splashy days lately. Use stop losses once you make gains and never ever let a stock get away from your buy point and no ifs and buts and no excuses.

Learn to use option strategies, selling options, naked short puts, bear call spreads, index spread trading on RUT, NDX, SPY, IWM, etc using Iron Condors, naked sale of straddles and drive a stream of consistent monthly gains.

Keep your outlook bright and sunny and out with that doom and gloom.. how long are you going to nurse that sickness ? And no delusions about that "imaginary recession "and latching on to Nouiel Roubini's graveyard tales.
 
Quote from Div_Arb:

Well by golly I am leveraging the farm and going all in.
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Caution my friend , caution...too many bears and shorts and vultures on this forum. If you are serious look out for your down side and these vicious and nasty blood splashed sell offs.
 
i believe they said the same thing a week ago and then changed their minds.
this is not a new bull market. selling rallys is still the thing to do.
 
Quote from vhehn:

i believe they said the same thing a week ago and then changed their minds.
this is not a new bull market. selling rallys is still the thing to do.
More...


When you get more buyers in the market, you won't be able to sell rallies and run for the hills in desperate moves like common Vulture and Kangaroos, you will be outwitted and outclassed and trampled by the bulls.

Market has a bullish tone..a double bottom was in this week..move over shorts your days are numbered and few.
 
Quote from HedgefundTrader2:

When you get more buyers in the market, you won't be able to sell rallies and run for the hills in desperate moves like common Vulture and Kangaroos, you will be outwitted and outclassed and trampled by the bulls.
More...


Quote from HedgefundTrader2:

Investing in down trending and troubled stocks could mean a complete blow out.
My hats off to value investors! You certainly amaze me with your brilliant doggy puke.
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http://www.elitetrader.com/vb/showthread.php?threadid=111474
 
Everything is dependent on the time scale.

What may be true for those with a 20 day outlook will not necessarily be true for those with a 60 day outlook. Beware and be vigilant. IBD is no longer of much value, and its founder's unbridled enthusiasm for American capitalism is passe'.
 
Here's a piece from todays Barrons that's topical, I apologize for not copying the authors name:

DESPITE THE BEAR STEARNS BAILOUT AND THE FED'S rate cut, a sense of foreboding is still abroad on Wall and Main Streets. Few investors feel good with an economic slowdown gathering force, the dollar in the dumps and contagion threatening to hit financial sectors previously unscathed or not even suspected of being at risk.

This in mind, we contacted James Finucane, a 67-year-old stock strategist who now works as a consultant in West Lafayette, Ind., home of Purdue University ("modest cost of living, a great brew pub and incomparable high-school hoops," he gushes). Among his talents: pool hustling. He was the 1961 National Student Unions pool champ, representing Notre Dame.

He also has been great at calling stock-market lows, including that reached in the week after the October 1987 crash. "Lows have always been easier for me to call than tops. I was premature in seeing the 2000 stock market high, for instance," notes Finucane, who long labored in Chicago at Stifel, Nicolaus.


Finucane argues that financial crises invariably yield spectacular buy points, and that we're at one now.
To him, we're now at yet another extraordinary low, especially with the unprecedented actions taken by the Fed of late to offer liquidity to investment banks and to commercial banks stuck with mortgage-backed securities of uncertain value. In fact, he foresees an explosive rally, with the Dow rocketing to 18,000 to 20,000 within a year from its current 12,361. The climb, he says, might begin imminently or take a few months of backing and filling before the market takes off.

Finucane argues that financial crises invariably yield spectacular buy points, especially when they reach crescendos. He points to calamities such as the 1970 Penn Central bankruptcy, the 1984 failure of Continental Bank, the 1994 Mexican peso devaluation and the 1998 collapse of the Long Term Capital Management hedge fund. Each time, important lows were made either simultaneously or within a month of the crisis.

He concedes that the latest crisis, which began last summer with the subprime-mortgage meltdown, has been "like a forest fire," spreading throughout the debt market, sometimes jumping fire walls to spring up in unforeseen areas. Yet he's now confident that the "panic lows" in the Dow, posted on Jan. 22 and 23, when it sank as low as 11,508, will hold. To him, the Bear Stearns bailout was a crescendo event.

Certainly, the news is hardly encouraging these days, with scary economic and market headlines like those for Alan Greenspan's recent assertion that the current financial crisis is the worst faced by the U.S. since World War II. A nasty recession impends or is already here. But crisis lows are always accompanied by hair-raising rhetoric and dire economic forecasts.

Finucane has long kept score, carefully cataloging predictions made at past economic inflection points. He points out, for example, that Greenspan contemporaneously described the Long Term Capital collapse in 1998 as the worst crisis he'd seen in his lifetime. Time magazine wasn't being intentionally ironic when it called the ad hoc government group cobbled together to grapple with the 1994 Mexican peso crisis the Committee to Save the World. Financier George Soros was just as downbeat after the 1987 stock-market crash as he is today, each time predicting a depression.

Why is Finucane bullish? For one thing, he observes that "governments and central banks have a clear incentive to promote growth, so to bet on a prolonged slump is to bet against the government, markets and human nature." He also takes comfort in a host of technical factors, including liquidity. Money-market cash, for example, has soared to $3.45 trillion, versus $2.2 trillion at the market low in March 2003. And U.S. domestic equity funds have seen a record nine consecutive months of net outflows, a skein that probably will hit 10 months when the Investment Company Institute releases its February numbers. The previous record was eight months, following the 1987 stock-market crash. The Conference Board Consumer Expectations Index is at a 17-year low. The Reuters-University of Michigan Consumer Confidence Survey is at its worst level since 1992. The American Association of Individual Investors finds small investors more bearish than they've been since 1990. And on and on.

What make these statistics all the more telling is that, by Finucane's reckoning, investors in 2003 had suffered more pain and yet were less fearful. By March 2003, for example, they'd endured 36 months of mostly falling prices, including 90% wipeouts in some top tech names. Retail sales had buckled in the run-up to the invasion of Iraq. United Airlines had filed for bankruptcy protection the previous December, the month in which McDonald's reported its first quarterly loss in 37 years. Industrial production was punk. Many forecasters warned of a double-dip recession close on the heels of the 2000-2001 recession.

In Finucane's estimation, months of stock liquidation and cash buildup, horrible sentiment and a bailout that could alter investor psychology have lit the fuse for an explosive rally. It will be ignited by one of those mercurial shifts in mood from abject fear to tentative confidence and, finally, wanton greed. "The setup is perfect," he asserts, using a pool-hall term. And he's confident that investors won't end up behind the eight ball.
 
Quote from aiki14:

Here's a piece from todays Barrons that's topical, I apologize for not copying the authors name:

DESPITE THE BEAR STEARNS BAILOUT AND THE FED'S rate cut, a sense of foreboding is still abroad on Wall and Main Streets. Few investors feel good with an economic slowdown gathering force, the dollar in the dumps and contagion threatening to hit financial sectors previously unscathed or not even suspected of being at risk.

This in mind, we contacted James Finucane, a 67-year-old stock strategist who now works as a consultant in West Lafayette, Ind., home of Purdue University ("modest cost of living, a great brew pub and incomparable high-school hoops," he gushes). Among his talents: pool hustling. He was the 1961 National Student Unions pool champ, representing Notre Dame.

He also has been great at calling stock-market lows, including that reached in the week after the October 1987 crash. "Lows have always been easier for me to call than tops. I was premature in seeing the 2000 stock market high, for instance," notes Finucane, who long labored in Chicago at Stifel, Nicolaus.


Finucane argues that financial crises invariably yield spectacular buy points, and that we're at one now.
To him, we're now at yet another extraordinary low, especially with the unprecedented actions taken by the Fed of late to offer liquidity to investment banks and to commercial banks stuck with mortgage-backed securities of uncertain value. In fact, he foresees an explosive rally, with the Dow rocketing to 18,000 to 20,000 within a year from its current 12,361. The climb, he says, might begin imminently or take a few months of backing and filling before the market takes off.

Finucane argues that financial crises invariably yield spectacular buy points, especially when they reach crescendos. He points to calamities such as the 1970 Penn Central bankruptcy, the 1984 failure of Continental Bank, the 1994 Mexican peso devaluation and the 1998 collapse of the Long Term Capital Management hedge fund. Each time, important lows were made either simultaneously or within a month of the crisis.

He concedes that the latest crisis, which began last summer with the subprime-mortgage meltdown, has been "like a forest fire," spreading throughout the debt market, sometimes jumping fire walls to spring up in unforeseen areas. Yet he's now confident that the "panic lows" in the Dow, posted on Jan. 22 and 23, when it sank as low as 11,508, will hold. To him, the Bear Stearns bailout was a crescendo event.

Certainly, the news is hardly encouraging these days, with scary economic and market headlines like those for Alan Greenspan's recent assertion that the current financial crisis is the worst faced by the U.S. since World War II. A nasty recession impends or is already here. But crisis lows are always accompanied by hair-raising rhetoric and dire economic forecasts.

Finucane has long kept score, carefully cataloging predictions made at past economic inflection points. He points out, for example, that Greenspan contemporaneously described the Long Term Capital collapse in 1998 as the worst crisis he'd seen in his lifetime. Time magazine wasn't being intentionally ironic when it called the ad hoc government group cobbled together to grapple with the 1994 Mexican peso crisis the Committee to Save the World. Financier George Soros was just as downbeat after the 1987 stock-market crash as he is today, each time predicting a depression.

Why is Finucane bullish? For one thing, he observes that "governments and central banks have a clear incentive to promote growth, so to bet on a prolonged slump is to bet against the government, markets and human nature." He also takes comfort in a host of technical factors, including liquidity. Money-market cash, for example, has soared to $3.45 trillion, versus $2.2 trillion at the market low in March 2003. And U.S. domestic equity funds have seen a record nine consecutive months of net outflows, a skein that probably will hit 10 months when the Investment Company Institute releases its February numbers. The previous record was eight months, following the 1987 stock-market crash. The Conference Board Consumer Expectations Index is at a 17-year low. The Reuters-University of Michigan Consumer Confidence Survey is at its worst level since 1992. The American Association of Individual Investors finds small investors more bearish than they've been since 1990. And on and on.

What make these statistics all the more telling is that, by Finucane's reckoning, investors in 2003 had suffered more pain and yet were less fearful. By March 2003, for example, they'd endured 36 months of mostly falling prices, including 90% wipeouts in some top tech names. Retail sales had buckled in the run-up to the invasion of Iraq. United Airlines had filed for bankruptcy protection the previous December, the month in which McDonald's reported its first quarterly loss in 37 years. Industrial production was punk. Many forecasters warned of a double-dip recession close on the heels of the 2000-2001 recession.

In Finucane's estimation, months of stock liquidation and cash buildup, horrible sentiment and a bailout that could alter investor psychology have lit the fuse for an explosive rally. It will be ignited by one of those mercurial shifts in mood from abject fear to tentative confidence and, finally, wanton greed. "The setup is perfect," he asserts, using a pool-hall term. And he's confident that investors won't end up behind the eight ball.
More...


Very good post. Good article. At least we have someone on ET who is not part of doom and gloom brigade.

The foll wing statement is so true: Stocks have a tendency to go up, its unnatural to bring them down via manipulations and shorting and sell programs. TO me the whole premise of having a stock market is so people go long and buy stock, without which there will be no stocks to sell or short. The guy is 100% accurate that we are at major bottom here since markets could NOT breach that Jan 22nd 23rd lows.

"so to bet on a prolonged slump is to bet against the government, markets and human nature."

Who does wants to go against the Feds, Treasury Department and Government that regulates and controls all our daily lives in this market place?

Treasury Secretary has already said we won't let our markets go hell in a basket's and we will keep an orderly functioning of equities.

TRANSLATION : .... do not fuck with us..we are lot stronger than you are.... We won't let our markets fall.
 
The $3.45 TRILLION in money market assets compared to the $2.2 TRILLION at the market low of March of 2003, is quite a telling statistic.

So has the 10 straight months of NET mutual fund outflows.

But the "Doom and Gloomers" on ET just don't want to wake-up to the "backstop" that is tied to this market. Instead, the "s2007s" crowd will keep harping on how Bernanke is trying to support the stock market and how the market wasn't allowed to drop far enough this past Monday during the Bear Stearns debacle . . . blah, blah, blah.

If this guy trades with his own money, I'd be absolutely SHOCKED.

:D
 
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