Tuesday, October 28, 2008

Buying on Bullish News

Bloomberg-TV interviewed Bob Prechter after the market close on Tuesday and asked him just how bullish Tuesday's 900 point rally could be? His answer is contained in this chart:


Essentially, the dynamic nature of today's rally is consistent with every other spike rally in this Bear market. Each has led to an excellent place to sell your stocks and go short the major indexes.

The text accompanying this chart explains in relevant detail why buying on bullish news is a suckers bet:

Have Investors Panicked and Capitulated?

Buyer beware.


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12 comments:

Wayne said...

Yep, I was able to add to my SIJ, DXD, SCC and SRS posltions.

I don't have the skill to day-trade whipsaws of the frequency this market is churning out lately, but I've been able to confidently add on these type of spikes.

Regards,
Wayne

Wayne said...

Just to prove in writing that I am indeed useless at short-term forecasting, here's my rank amateur "Short Term Update" for the next 30 trading days:

* Institutional capital remains mainly on the sidelines;

* Individual investor capital continues to feed the Slope of Hope, possibly pushing the Dow up a few hundred more;

* Remaining optimism evaporates after Election Day, and the downward move continues to below 7800.

Beyond that, government actions (like the proposed additional $600B of mortgage guarantees) may temporarily prop up certain sectors like Real Estate. There may even be some fleeting rally in consumer-related stocks as we kick off the shopping season. But I suspect the major downtrend will overpower these before year's end.

Regards,
Wayne
(unafraid to look stupid, but boldly taking the bear by the .... uhh ... claws)

Anonymous said...

At this point in the economy personal names are hardly important, but if it matters, you may call me "Mr. Joshua."

I have called every significant market move since 1965.

At this point, in light of all factors:

THE BULL MARKET HAS BEGUN.

THE ECONOMIC CRISIS IS OVER.


Look for a long term expansion in the stock market starting for the balance of the year with a raging bull for the next 4-6 years.


NOBODY BUT YOU (AND ALLAN) KNOWS THIS YET.


GO LONG. STARTING NOW.

AS FOR THE BEARS? THEY ARE DEAD.

Mr. Joshua in Idaho
You will hear more from me in the future. Get used to my name and my legacy.

Anonymous said...

Mr. Joshua is awfully arrogant and full of himself.

Legacy huh? Best of luck with that.

I sure hope you're as smart as you proclaim because you sound like a d!ck otherwise.

-Penn State Eric

Anonymous said...

Well the market is up a couple of hundred points.

My legacy is affirmed again.

I'm trying to work a deal where Allan let's me charge for my advice.

Mr. Joshua in Idaho

Anonymous said...

40-70 pts is hardly a couple hundred. I think you got a little too excited and commented a bit early.

You advice thus far is a bit half a$$.

Anonymous said...

On the contrary, the Dow opened up about 240 point or so. You sell high, remember?

Right on target.

Would you like to know where to send the checks?

Mr. Joshua in Idaho

Anonymous said...

Turns out both "Penn State Eric" and Joshua are right... Joshua's legacy is that of being an arrogant dic#!

Joshua (I refuse the "Mr." portion as that is EARNED as opposed to allowing us to call you that) you've helped no one on this blog by the way. You're advise is nothing but specilation and isn't supported by anything.

How will Allan every repay you for your advice and input when he'd probably go broke listening to the gross assumptions you've just made?

I don't know how things work in Idaho, but here in the real world facts, supporting evidence, and legitimate form of credential(s) tend to get "checks" sent to you.

Maybe try a visual like a chart or specific event to relate your speculation to. You're one of the many reasons why the market is going bonkers, speculators.

BRING FACTS or watch the show. For an old timer, "since 1965", you being on this very blog makes me question your credibility. Remember, everone reading/writing is here to learn and help one another, so we can smell f(l)akes like you a mile away.

BRING US SOME FACTS or go tend the cows.

Anonymous said...

My methods are proprietary.

Market back up again, nearly triple digits.


Mr. Joshua in Idaho.

Anonymous said...

BTW, I live in our family's 440 acre compound. We have no cows, but do two helopads count?

You can chopper in any time you like.

My last guest was Mr. Paul Tudor Jones.

Mr. Joshua in Idaho.

Anonymous said...

If your methods are strictly proprietary, I believe you've come to the wrong place.

Anonymous said...

Well the market was up again on Friday another couple hundred.

Right on the mark again.

Want to know where to send the checks?


Mr Joshua in Idaho.