Reasoning for the sell off
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I never said I didn't think we'd have a correction. I said I did. That's why most of my money is on the side waiting for it. It's just taking an awful long time.
If it doesn't correct, it may just keep going up. If that happens, maybe we're in for an even worse summer.
On the other hand, I remember all the calls for correction in 1999 too. Bubble bubble bubble. Everyone expected it, all the way to Nasdaq 5000. Not saying that will happen, since we have no bubbles right now, but it's still interesting.
I think in 1998 and 1999 a lot more people were shorting than now. The whole point is, there's mixed signals all around and I don't think anyone knows what's going on.
When a market is really going to crash is when everyone is IN it... there's no BUYERS left.
Are all you people long right now? If you're not long, and lots of others aren't long... there's more buyers.
If it doesn't correct, it may just keep going up. If that happens, maybe we're in for an even worse summer.
On the other hand, I remember all the calls for correction in 1999 too. Bubble bubble bubble. Everyone expected it, all the way to Nasdaq 5000. Not saying that will happen, since we have no bubbles right now, but it's still interesting.
I think in 1998 and 1999 a lot more people were shorting than now. The whole point is, there's mixed signals all around and I don't think anyone knows what's going on.
When a market is really going to crash is when everyone is IN it... there's no BUYERS left.
Are all you people long right now? If you're not long, and lots of others aren't long... there's more buyers.
Its not taking a long time, its taking the usual time. The indexes will meander about looking for direction. Sometimes they will seem up, sometimes they will seem down. This will take about a month, maybe two. By March-April there will be indecision and then all hell will break loose in May.
This isnt going to take a few weeks. Its going to take months.
This isnt going to take a few weeks. Its going to take months.
You may be right... but that's what was said in October, right here too, with all the top calls. If you left the market in October, how much $$ would you have missed between Oct and Dec? You would have missed the biggest runup of 2006.
So, how many people are prepared to sit for 'months'? I think, up or down, it's going to be a leap of faith. But then, the stock market is legalized gambling right
? If it goes up right now, if you're not already in, you'll get in. If it goes down, you'll sell, and when it starts turning, you'll get back in. It will not go all the way down til you, and everyone else, is in. THEN it's going down hard.
Judging from just the posts here... are we all in? Nope.
Hrm.
Your mistake is your looking at a message board and saying to yourself "This time it might not be true because they said x and x last time on the board and it didnt come true"
Use common sense and logic. Dont listen to people on tv or the message board. Ask yourself some questions.
1) Why would there be a sudden trend reversal during the end of the year when stocks are normally very bullish? Why would there be a trend reversal right before a major election? Has their been trend reversals during that specific time of year in the past right before elections?
2) Did any of the index charts at the time suggest there might be a trend reversal? Nope, they didnt. They were all making new highs and running above the moving averages.
3) The TNX (ten year yield) was on the way down. When has the market suddenly reversed on a down-trend of the TNX?
4) Classic indicators. Bull:Bear sentiment. Vix. etc. Were all these demonstrating that there would be a trend reversal in October? Nope, they were not.
I could go on. There was no indication at the time for a trend reversal.
However, go through the same list again. You will see that there are many indications developing.
Dont worry if you miss out on a chance to make money. The market is open everyday and there will be more chances.
There are many people out there that do not have their money deployed right now. They are waiting for that opportunity patiently. While they wait, they spend time with their family, go on vacation and just not work.
It is those people who sit by the monitors everyday thinking that they must trade, they must make money, are the ones who will ultimately lose money.
If you do not see an obvious opportunity to deploy your money...if you see obvious troublesome classic indicators, then why should you deploy your money....
You deploy your cash because you fear that you will not make money, but you dont have the fear that you will lose money.
Kick back and wait until the opportunity presents itself. If you have to wait months, then you wait months. Thats why you got into trading in the first place, because you dont have to work.
An obvious opportunity has presented itself today and you guys missed it. The price of oil and related energy stocks are being panic dumped and shorted. Ultimately, they will come down to bargain basement prices. Its just a question of when will be the lowest time. . .
Use common sense and logic. Dont listen to people on tv or the message board. Ask yourself some questions.
1) Why would there be a sudden trend reversal during the end of the year when stocks are normally very bullish? Why would there be a trend reversal right before a major election? Has their been trend reversals during that specific time of year in the past right before elections?
2) Did any of the index charts at the time suggest there might be a trend reversal? Nope, they didnt. They were all making new highs and running above the moving averages.
3) The TNX (ten year yield) was on the way down. When has the market suddenly reversed on a down-trend of the TNX?
4) Classic indicators. Bull:Bear sentiment. Vix. etc. Were all these demonstrating that there would be a trend reversal in October? Nope, they were not.
I could go on. There was no indication at the time for a trend reversal.
However, go through the same list again. You will see that there are many indications developing.
Dont worry if you miss out on a chance to make money. The market is open everyday and there will be more chances.
There are many people out there that do not have their money deployed right now. They are waiting for that opportunity patiently. While they wait, they spend time with their family, go on vacation and just not work.
It is those people who sit by the monitors everyday thinking that they must trade, they must make money, are the ones who will ultimately lose money.
If you do not see an obvious opportunity to deploy your money...if you see obvious troublesome classic indicators, then why should you deploy your money....
You deploy your cash because you fear that you will not make money, but you dont have the fear that you will lose money.
Kick back and wait until the opportunity presents itself. If you have to wait months, then you wait months. Thats why you got into trading in the first place, because you dont have to work.
An obvious opportunity has presented itself today and you guys missed it. The price of oil and related energy stocks are being panic dumped and shorted. Ultimately, they will come down to bargain basement prices. Its just a question of when will be the lowest time. . .
Quote from hels02:
You may be right... but that's what was said in October, right here too, with all the top calls. If you left the market in October, how much $$ would you have missed between Oct and Dec? You would have missed the biggest runup of 2006.
So, how many people are prepared to sit for 'months'? I think, up or down, it's going to be a leap of faith. But then, the stock market is legalized gambling right
If it goes up right now, if you're not already in, you'll get in. If it goes down, you'll sell, and when it starts turning, you'll get back in. It will not go all the way down til you, and everyone else, is in. THEN it's going down hard.
Judging from just the posts here... are we all in? Nope.
Hrm.
Here's a touchup with reality: Stocks are always owned by somebody. It's not like 50% of all market capitalization is "unowned" at any point in time. Somebody is always long. "Nobody is long" = Impossible. That's how markets work.
What happens is positions change hands. And they change hands faster and faster while a market is slowly (!) topping out. That's your distribution days.