The Coming Bear Trap

Bull or Bear?

  • Bull

    Votes: 20 23.3%

  • Neutral

    Votes: 35 40.7%

  • Bear

    Votes: 31 36.0%
  • Total voters
    86
  • Poll closed .
Quote from S2007S:

How is the media hyping up the housing collapse, the media does hype up about 99% of the news out there, but this housing drop was written all over the place. When you see prices of houses going up 10-20% a year for 5 years straight you certainly have to think to yourself how any of this is still possible. The sell off in housing is not done. Prices still have plenty of room to fall.
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I agree. I believe the beginning 10-20% was the subprimes. Next is Alt-A which I just posted a link to a CNN report on...this is where the big boys get stung.

http://money.cnn.com/2007/03/19/news/economy/next_subprime/index.htm?source=yahoo_quote

Now those numbers are scary and the fear alone could trigger a rash of stagnation and lack of buying/rush to sell at lower prices.

We'll have to wait and see, but I think these Alt-A loans are going to do real damage.
 
Look at the risk/reward profile now.

Look at the run the indices have had since July of last year.

Consider that earnings are slowing.

Add in the housing woes (not just mortgage woes, but housing woes, which relate to everything appliance sales to equity/liquidity).

I think the risk/reward profile has changed substantially and that the media headlines are catching up to this change.

But I am an admitted bear right now, mostly sidelined, getting a certain fixed return on my money that while not thrilling me, at least is letting me sleep more easily.

I do not think the media is over-reporting the bad in terms of qualitative reporting.
 
Quote from ByLoSellHi:

Look at the risk/reward profile now.

Look at the run the indices have had since July of last year.

Consider that earnings are slowing.

Add in the housing woes (not just mortgage woes, but housing woes, which relate to everything appliance sales to equity/liquidity).

I think the risk/reward profile has changed substantially and that the media headlines are catching up to this change.

But I am an admitted bear right now, mostly sidelined, getting a certain fixed return on my money that while not thrilling me, at least is letting me sleep more easily.

I do not think the media is over-reporting the bad in terms of qualitative reporting.
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Even though the media wants to get ahead of the story and predict the worst, they seem to be under orders to try and calm the public at the same time. To me, it smells fishy.

The other reason I am so bearish at this point, I have more setups looking like dead cat bounces then good intermediate longs. Typically when this occurs on my screens, there is more room to the downside.
 
Quote from S2007S:

nasdaq volume is pathetic.....


1,124,650,000 as of 2:15pm.
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Yes, it is. Let's get the indexes to rally to the 50DMA over the next week or two and then the short raid can begin.:mad:
 
Quote from S2007S:

nasdaq volume is pathetic.....


1,124,650,000 as of 2:15pm.
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I'm still puzzled why anyone would TRADE off of volume.
My clearing firm only PAYS ME based on PRICE!
You still don't get it.

SPX now 40 handles off the lows, and you are still LOOKING for things to be "negative" about. Meanwhile, you have missed a HUGE move!

Amazing.

:D
 
Quote from Landis82:

I'm still puzzled why anyone would TRADE off of volume.
My clearing firm only PAYS ME based on PRICE!
You still don't get it.

SPX now 40 handles off the lows, and you are still LOOKING for things to be "negative" about. Meanwhile, you have missed a HUGE move!

Amazing.

:D
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Go back and look at the volume after the FEB 27th drop, the markets rallied and everyone thought the markets were back on there way to new highs because everything was all fine and good again.

If you can look back and see the declining volume you would have known that the market rally was just a head fake. Look at the volume again today, nice rallies across the board yet volume is anemic.
 
Quote from calibertrader:

OK, the market did what it had to short term, take out 12,000 and bounce hard. Now I believe we're going to get a 1 - 4 week rally ranging from 2 - 5% before the next leg down. We're in the last two weeks of quarter end, where news tend to be quieter ahead of earnings season. Of course there will be earnings warnings and economic data, but the market needs some relief after the volatility over the last 3 weeks, and a small relief rally would be just what the doctor ordered (a.k.a "Bear Trap").

Now having said all that, would I buy into the rally, NO. In fact, I would use the opportunity to move to almost 100% cash and wait for the opportunity to get short. If you're not a short seller then go back and review your trades from the bull market and prepare and keep a watch list for the next. Otherwise, you probably have a few weeks to take a breather.

Why am I so scared of the market, even if we get a follow through confirmation rally day? The politicians got involved in trying to calm us down. They seem to be trying too hard to tell us everything is ok. Not only domestic politicians but foreign one's. Now that's scary. I feel like something is about to give and global governments are holding on to the last fiber of a string about to snap. So prepare for more calming talk from the fed, white house, congress, and other foreign leaders. Then prepare to look out below if you buy into it.

Does this have to turn out to be some multi year bear market, absolutely not. Does it have to go further lower, yes. But as always, that's when the opportunities are the most plentiful and fruitful!!

PS

If it were up to me, I'd love to see 10,000 on the DOW violated. That would set off a panic bottom worldwide!!! Good Luck.

WHAT DO YOU THINK?:D :confused:
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Couldn't agree more -- I believe 1 month from now we are significantly higher... after that I don't know.
 
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