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mustbepatient (99.29)

Shorting the phone book

Recs

3

June 11, 2009 – Comments (4) | RELATED TICKERS: UCO , FAS , TNA

I called for a market top way, way too early (April 24th), in the middle of what has turned out to be a historic non-stop market run.  However, I have managed to tread water by virtue of my long positions.  Right now, however, I am maximally short.  Historically:

-Bear market rallies retrace over 100% of their gains

-Bull market rallies of this magnitude retrace 60-90% of their gains

I would like to hear arguments why this time will be different than previously.

 

Of course, the market could go up for another month before starting the retrace.  However, since retail investors have been moving a lot of money into the market recently and divergences are developing, I think now is a good time to position for a correction.  Finally, the dollar has started to rally despite extremely bearish sentiment; a dollar rally would be a serious headwind for the markets.

Disclosure:  short leveraged ETFs

4 Comments – Post Your Own

#1) On June 11, 2009 at 11:55 AM, williamsullivan8 (61.79) wrote:

Hey there.  Someone else's post also mentioned that a weakening dollar helps push stocks up (strengthening dollar helps push stocks down).  Can you please elaborate, explain, or add any insight?  Thanks in advance I appreciate it.

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#2) On June 11, 2009 at 12:22 PM, kaskoosek (99.76) wrote:

williamsullivan8 

 

A strong dollar means less money and deleveraging.

 

A weak dollar means the fauset is open. 

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#3) On June 11, 2009 at 1:40 PM, bullishbabo (100.00) wrote:

To piggy back on what kaskoosek said, a stronger dollar means there are fewer dollars chasing the same assets, so prices will be lower.  A weaker dollar probably has been caused by inflation, and causes many more dollars to be chasing the same assets, so those assets are worth a lot more dollars.  That's generally why commodities (hard assets) are considered good hedges against inflation, since you can't "print" commodities like you can print dollars.

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#4) On June 15, 2009 at 10:30 PM, williamsullivan8 (61.79) wrote:

Thanks guys

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