Category: bear

Please reread entries from 9/25/07 and 7/25 throuogh 7/28.
We had the break out to new highs in the market getting everyone exited about new highs. In the long run a double top or the head on a new formation of a head and shoulders is developing.
Now we are heading down.
Inflation has gripped the psychology of the profressional investor finally and they are selling.
The market does not like inflation. Oil at $90 per barrel is potentially inflationary.
This will put a crimp in the economy because people will not be able to spend as much money.
This is not a short term happening.

Question asked on 10/21/2007 at 05:02 AM :: Comments to date: 0

Category: bear

Yesterday was no surprise to many of my readers. I have been cautioning them for the past 3 months to be prepared for this to happen.
At one point the dow was down over 400 points.
Now what to do?
I have stated before that the bear on the average goes for 4 months with a 22% decline on the first leg.
That puts the Dow at 11000 and the S&P at 1200 to 1300.
The Dow has made the greatest move therefore from a relative strength point of view it will be the last to go down the hardest.
Notice the flight to quality was to P & G yesterday because it has been a lagard for awhile compared to the big movers.
As I have stated before that the ultimate top in the market was 2000 - the dotcom frenzy.
Wehave been experiencing the rise of the bluechips but the NASDAQ hasn't even risen 50%.
The 2nd wave down is starting and where do you park your money.
High yielding resource stocks for one.
Money market for another.
SDS is a buy. This is a double down S&P short fund so this stock rises when the market goes down.
Get your money ready for the winter so when the bear goes back to sleep on a short term basis you will be ready to pick-up bargins.

Question asked on 07/27/2007 at 06:45 AM :: Comments to date: 0

Category: bear

When the oceans tide starts to go out it takes everything down.
Is this the beginning of the tide going out.
Really the peak of the Nasdaq, euphoria, and ultimate buyiing frenzy was the dotcom era.
We are no where near that era. But the longest and weakest bull market is about to end for the common stock for at least 4 months.
The average first leg down for a bear market is 22% and 4 months.
Are you ready for that bear?

Question asked on 07/26/2007 at 06:56 AM :: Comments to date: 0

Category: bear

Speculators are borrowing money to buy stocks at a rate never seen in history -- not even during the height of the tech mania. “Margin debt” in March totaled $317 billion… well over the bubble record of $300 billion back in March 2000.

“High levels of margin debt could mean the stock market’s record highs are built on shifting sands,” . “The first little correction we get and these people will be heading for the exits all at once.”

If you’re a buyer in waiting, that’s great news. If you have your life savings plus a few thousand of your broker’s money in a “hot fund” you can’t remember the name of… ehhh… you might want to rethink your strategy.

Question asked on 05/10/2007 at 03:57 AM :: Comments to date: 0

Category: bear

Doubts immediately crowd the mind when the market starts down, especially when your idea appears not to work immediately. We second-guess. We get nervous. Human beings are an impatient lot by nature, I’ve come to believe. Patience is an acquired habit.

So the market has its first significant down day in what seems like months with the Dow down about 160 points. In fact, just take a look at the Dow Jones industrial average over the last year:

Patient investors knew the break would come sometime. No market goes up in such a neat line for very long, as this one has from July to November. Maybe today is the day we start that break. Or maybe it is only a way station before a march to new highs.

I take the position that markets go up and markets go down. Market tops exist, as do market bottoms. The difference is that I readily admit such tops and bottoms are elusive prey -- so much so that I believe they are not worth the timing work to pursue. Tops and bottoms are decisively determined only in hindsight. I spend a lot more time looking forward and trying to figure out individual opportunities than I do worrying about where the market will go.
Once you put a game plan together hop onto the train and if it goes the wrong way hop off and find another train to hop on that could be going the right way.
On these corrections wait patiently to pick up bargains later on. Time to tighten up your stops and go to cash for the next round of dollar weakness and inflation run of commodities.

Question asked on 11/28/2006 at 07:17 AM :: Comments to date: 0

Category: Stocks

There is a bubble in equities, but unlike in the late 1990s, which was a rating (PE) bubble, this one is an earnings (E) bubble. Higher interest rates are deadly to a PE bubble (just as higher rates tend to be punishing, in a relative sense, for high PE stocks).
Continued

The answer to: "Watch out after Labor Day! (9/2/06)"

Question asked on 09/02/2006 at 05:47 AM :: Comments to date: 0

Category: Stocks

Toll Brothers, Aug. 23, 2006

“Housing Slump Proves Painful for Some Owners and Builders”:

“‘It would be difficult to characterize the position of home builders as other than in a hard landing,’ says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported that net income fell 19% in the third quarter ended July 31.

“In his 40 years as a home builder, Mr. Toll says, he has never seen a slump unfold like the current one. ‘I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy,’ he says. ‘This time, you've got low unemployment, you've got job creation, you've got a stable stock market, and relatively low interest rates.’ ”

It seems a dose of reality is needed for Robert Toll as well. The macroeconomic connection missed by Robert Toll is that housing was and is in a bubble and bubbles pop. As for “low unemployment and job creation,” it should now be obvious to everyone that the reason they were low was because an overheated housing bubble was creating jobs until the bubble popped. The reason you have not seen a downturn like this before is because you have not seen a national housing bubble like this before. Let's now turn our focus to the Question of the Day.

The answer to: "Housing, Greed and Economy. (8/30/06)"

Question asked on 08/30/2006 at 06:04 AM :: Comments to date: 0

Category: Stocks

The Fed announced a pause in its rate-hiking campaign on Tuesday, but it turned out to be a nonevent for the market. The S&P 500 attempted to gap above resistance on Wednesday morning, but by midday, it was clear the attempt was doomed to failure. As of the close of Thursday, the S&P remains within the flag pattern which is bearish. This was a clear case of the news being fully priced into the market, and stocks are already looking beyond the Fed.

The answer to: "Stocks and Markets (8/14/06)"

Question asked on 08/14/2006 at 06:56 AM :: Comments to date: 0

Category: Stocks

If the current Dow average around the 11,000 mark, turns lower,
the DJIA will fail to follow the Transports into record ground. But even if both averages
satisfy Dow Theorists by moving to fresh highs in unison, the broader S&P would likely
still have a lot of catching up to do, an indication of the lasting weakness in much of the
market since 2000. Meanwhile, larger technology companies, still a major segment of
the economy, continue to lag hopelessly behind a market led by cyclical stocks and
commodity producers.

The answer to: "Dow Theory - bearish? (7/18/06)"

Question asked on 07/18/2006 at 05:17 AM :: Comments to date: 0 :: TrackBacks to date: 0

Category: Stocks

Insider buying is one of the most telling market indicators.

When company insiders (CEOs, CFOs, major shareholders, directors, etc.) are bullish enough to spend millions of their own dollars to buy stock on the open market, it means they think stocks are cheap and worth owning.

However, when those same insiders are selling stocks en masse, the market is generally overextended and stocks (on a whole) are expensive. That’s when you want to exit stage left. Or at the very least, you want to sit on the sidelines and observe from a distance. (Continued)

The answer to: "Insider Selling vs Buying (7/15/06)"

Question asked on 07/15/2006 at 06:18 AM :: Comments to date: 0 :: TrackBacks to date: 0

Category: bear

HD is falling with the market. If it breaks 37 it will be a weak stock technically.
If the money managers see sales growth declining they will be dumping more of the stock.
Sector rotation is out of retail into cash due to rising interest rates. People are running scared.
If the buyers dry up who is going to buy. There is a formidable triple top at 44 which HD must break through to become Bullish.

Question asked on 06/01/2006 at 06:02 AM

Category: bear

The market's current P/E is about double its "normal" level basd on current earnings.

The answer to: "Is the stock market "cheap?""

Question asked on 05/28/2006 at 06:28 AM :: Comments to date: 0 :: TrackBacks to date: 0