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goldminingXpert (29.46)

A new direction, or just another dip?

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May 06, 2010 – Comments (37)

Since I've been horribly wrong over the past year in terms of my forecasting, I'd pretty much given up hope on this account and on my economic outlook. I still believe the economy is terrible and should resume contracting, but the market has been telling me I've been wrong for ages. Now, I've had two +1000 point days this week and it appears the market may finally be correcting.

What's people's opinions? Is this a buying opportunity or are things finally turning? The one upside I've had is that I've been bearish on the Euro since it touched 1.45 last fall. That's at least redeemed some of my losses from the broader market. That said, it's been a rough year for me investment wise, and I'm curious to know what you all think this latest correction represents (if it represents anything at all.)

GMX

37 Comments – Post Your Own

#1) On May 06, 2010 at 2:15 PM, Superdrol (97.22) wrote:

Depends on how long it hangs here.  Sell offs are always quick no matter what kind.  The media does not seem to help matters anyway.  The best thing to do is manage position sizing, take losses quickly, and kept tight stops.  No one ever gets it right all the time, but everyone has the ability to limit damage.

 

As far as if it is a new direction, I don't have the foggiest idea, my guess is 'no' this is just another dip to hit.  Overall data within the US has been getting better the past 12 months.  While it is not 'good' by any means, the improving trend is still prevailing, plus this overall drop is not much in lieu of what the market has done within the past year.

 

Blow-off corrections like this are healthy to allow valuations catch up.

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#2) On May 06, 2010 at 2:16 PM, cbwang888 (25.33) wrote:

 

US T-bonds are going up today so I think people aren't thinking of US going down the path of PIIGS soon.

The same problem in developed countries, including US. Only Fed can print more because of USD is the global reserved currency. Thing will change gradually and in 2 ~ 2 years down the road, the crash will come ...

Thumb down solars and financials. Thumb up commodities and PMs.

 

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#3) On May 06, 2010 at 2:17 PM, goalie37 (91.45) wrote:

Like you, I don't have much luck predicting short term movements in the market.  Is this a buying opportunity?  I only have one question to answer that to myself - Does this downturn (and the macroeconomic events causing it) affect the long term profitability of my companies?  I personally don't believe that the amount of Coca Cola people will be drinking in 2020 will be impacted by the bond market in Greece in 2010.

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#4) On May 06, 2010 at 2:18 PM, outoffocus (23.09) wrote:

Well considering the time when investor bullish sentiment peaked and Alstry "quit", I figure the top occured somewhere around mid to late April. Seems like I've been right so far.  Which made my initial "top" call about a year early.  I'm still in wait and see mode.  I have alot of "dry powder" this time around so bring the correction on!!!

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#5) On May 06, 2010 at 2:18 PM, binve (< 20) wrote:

Hey GMX! Good to see you man! It could be either. If this isn't the start of a trend change (I have mixed feelings), then it is not a dip to be bought to massive new highs. It is a dip before another stab at the 62% retrace from 2007-2009. Risk / reward does not favor being heavily long here. But my opinion is pretty worthless :). Take care man!

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#6) On May 06, 2010 at 2:21 PM, SUPERMANSTOCKS (59.56) wrote:

This is a nice corrections. This will allow you to pick up what your after at a lower and not always a better price. Meaning we could still go a hair lower. However, expect the DOW, S&P and NASD to be up very nice tomorrow. Also I will add if you're looking to invest into bonds try these

PRSIX and PREMX

 

Both of these have nice dividends and great exposure to expand your portfolio.

 

 

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#7) On May 06, 2010 at 2:45 PM, JaysRage (89.42) wrote:

Today's move of over 3% likely means that this downswing isn't going to end well at all.   The downturn was lead by commodities and emerging markets and now it has spilled over into the safe haven stocks.    I suspect that this one could be a very significant correction.   I got crushed today along with most of the market, and I was sitting 50% in cash.   The positions that I did have got absolutely buried.   Fear has set back in.   People are running for the hills.  

What I have in cash is staying in cash for the time being.   A 3% move is a rare move.   5% is even more rare.   If today ends down 5%, I suspect this is a new bear market.  

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#8) On May 06, 2010 at 2:48 PM, 100ozRound (29.39) wrote:

Welcome back!

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#9) On May 06, 2010 at 2:53 PM, 100ozRound (29.39) wrote:

8% down hardly seems like a dip.

The bears are coming out of hibernation?

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#10) On May 06, 2010 at 2:55 PM, outoffocus (23.09) wrote:

The DOW went down 1000 points.  I've never seen anything like it. O.O. Who pissed off Goldman Sachs?

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#11) On May 06, 2010 at 2:58 PM, ragedmaximus (< 20) wrote:

according to portefullie chart were due for another market crash in 120 ndays 4 months september give or take days and the way it looks this year i believe it!

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#12) On May 06, 2010 at 3:56 PM, Upstar75 (< 20) wrote:

Did I just see proof of the market being manipulated. It droppes to almost 9% and then rebounds within 30 min to 3.5%, who has the money to make the market rebound that way??????Will someone please explain what happens with the blackbox/algorithmic trading?  It sounds like a very skewed 'playing field.' And Alstry, will you explain in a little more detail the impact you anticipate from the influence of the Digital Age?

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#13) On May 06, 2010 at 3:57 PM, Upstar75 (< 20) wrote:

Did I just see proof of the market being manipulated. It droppes to almost 9% and then rebounds within 30 min to 3.5%, who has the money to make the market rebound that way??????Will someone please explain what happens with the blackbox/algorithmic trading?  It sounds like a very skewed 'playing field.'

 

Sorry for the previous post...that was for MR Alstrys blog..but still can someone explain

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#14) On May 06, 2010 at 4:04 PM, IIcx (< 20) wrote:

Hey GMX,

I just closed a bet on SDS, QID, the VIX, and DOG. Still have TZA open, got in late, but was looking for SPX 1135 as the downside target.

Time will tell, the markets will either rise of fall from here ;) 

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#15) On May 06, 2010 at 4:08 PM, Pandorabelle (82.38) wrote:

Hmmm...I asked the same about blackbox/algorithmic trading on Alstry's blog.  If anyone can break this down, I'm very interested.

 

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#16) On May 06, 2010 at 5:54 PM, Ph1sh55 (28.45) wrote:

What's happening in the eurozone is an order of magnitude larger than the lehman brothers event, which basically set off the last crash.   Most people are just not realizing this yet...

I see the potential for a very short term rebound here just to give people some hope and help them believe that this was just due to a series of 'glitch' trades and all will be good again, but a trend change has definitely taken place.  You just got your free sneak preview today of whats to come.

 

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#17) On May 06, 2010 at 6:28 PM, rexlove (99.46) wrote:

I've been waiting for a 10% pullback from the highs - and although we got it for a couple of minutes today - I'm not totally convinced today was the day. I still have a lot of cash on the sidelines and will be waiting to buy if the S&P drops to 1100 again. 

It should be interesting to see what happens when they determined what exactly happened today. A lot of strange stock moves in companies like PG, MMM, and ACN.

 Breaking News: They just cancelled a lot of fishy orders that went through today! 

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#18) On May 06, 2010 at 8:17 PM, ChrisGraley (29.75) wrote:

It tastes like chicken, but it smells like fear

 

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#19) On May 06, 2010 at 8:33 PM, bullnada (< 20) wrote:

If you look at the comments on these posts you can see that no one knows what the heck is going on.  I am no stock Guru but I can see the writing on the wall.  Seems all of you are gambling at this point. You might as well go to Vegas. Your odds are better. How could you Gamble with your hard earned money when up is down and black is white? I have lost nearly a million in the market.  Please dont be me...

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#20) On May 06, 2010 at 8:35 PM, russiangambit (29.30) wrote:

Well, 3 sources that I follow say it is a trend change - 1) Big Picture - Ritholz is 100% in cash 2)TPC - short & cash 3) IBD - market in correction

And it looks like Flackenstein is going to be right big time again with his gold call.

 

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#21) On May 06, 2010 at 8:57 PM, awallejr (81.55) wrote:

Port's chart has been pretty spot on.

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=386610&t=01005222198512106855

After today we are now approaching the lower end of the range spread.   We were certainly due for a correction after the market ran up about 1300 points from its February low.  It just makes me nervous when it happens in such a short period of time.  it really does bring back memories of Fall '08 and early '09.  I did buy some ATPG today after having sold out at $23 only a couple weeks ago.  Wish I put in a buy for ACN at .01.

I have to believe today was a question of computers running wild.  I'm not sure if the uptick rule would have prevented the wild short swing.  It certainly rattles one's confidence in the system.

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#22) On May 06, 2010 at 10:25 PM, d1david (29.22) wrote:

outoffocus: Alstry "quit" - the top is in...

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#23) On May 07, 2010 at 2:56 AM, ralphmachio (25.37) wrote:

Just my opinion, you guys need to check out the 30 year chart to see where this is going. This may not be the little correction that the doctor ordered, but the dosage of reality that we have needed for 14 months. You bulls were living on borrowed time, but if you could be dynamic enough to switch now, you might be gods.

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#24) On May 07, 2010 at 3:05 AM, SUPERMANSTOCKS (59.56) wrote:

1000.00 point on a error. Not a real drop and yet I am not running for the hills and don't plan on it.

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#25) On May 07, 2010 at 10:43 AM, kdakota630 (29.56) wrote:

Despite yesterday (and the first hour or so of today), I'm holding out that we'll continue to see the market rise until June or July at the earliest.

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#26) On May 07, 2010 at 10:45 AM, dragonLZ (99.38) wrote:

I knew you'd come back (see my comment below made miutes before your post)...Scary, isn't it...? 

I think we have 1-2 more months left of this correction.

 

#3) On May 06, 2010 at 2:21 PM, dragonLZ (99.72) wrote:

Do I know we don't crash far lower?  No.  But do I think its likely we go, say, to the February lows again?  No.  My reason for that is thats a long way down, almost far enough to qualify as its own bear market on historical charts.  And I don't think such a dramatic dip has occured so soon after a major meltdown in the past.

But I think the correction has to be severe enough to have the bears come out (confidently) with: This is the beginning of the end. We told you the big crush is coming. All of this was just a bear market rally...we told you so... etc.

Until that happens, I think we won't have a meaningful correction. 

I'm sure you noticed we haven't heard from goldminingXpert yet, and he's up 2,000 points last few days (up 900 just today).

Once GMX is up to 5,000 - 6,000 points range, I think that's when it will feel like bears are definitely in control again. That's when I would start buying.

Another "indicator" I like to watch is alexpaz. Once alexpaz's rating gets back to 90 or so, definitely the time to get back in with both feet.

However, I do agree with you slowly buying GNW (and some other ones) at these levels is not a bad idea.

Good Luck!

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#27) On May 07, 2010 at 10:46 AM, kdakota630 (29.56) wrote:

Also, to GMX... regarding you thinking this account was worth giving up on, I've been watching your score and ranking fall faster than I'd expected, but I also knew that once the market turned, you'd be back toward the very top very quickly.  I'm largely in the same boat, but your turn-around will be more dramatic.

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#28) On May 07, 2010 at 5:01 PM, ralphmachio (25.37) wrote:

I wish someone would have changed my mind two months into the rally when I was sure the bear market would resume.

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#29) On May 07, 2010 at 8:19 PM, NYCFOOLIO (< 20) wrote:

If this is just a quick correction; it was lethal...markets have lost everything they gained in 5 months; basically in 5 days??? wow...hopefully folks have some cash to play with when opportunity presents itself

one more thing - anyone have any opinions on BP, ATPG, and OGZPY? anyone?

 thanks

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#30) On May 07, 2010 at 11:00 PM, Option1307 (29.75) wrote:

Nice to hear from you GMX, hope all is well!

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#31) On May 18, 2010 at 7:33 PM, MikeMark (29.42) wrote:

My opinion on the stock market is that there appears to have been some price rises that aren't really understandable. Nothing fits in some cases. I see high p/e ratios, little or no profit, losses, stocks going up and staying that way for no reason.

Now finally in the past week or so, things are beginning to move in more understandable and expected directions.

I actually think we are entering a long slow value slide. The prices may stay stable or even go up, but the value of the US$ that everyone measures in will decline. I think smart money will measure value independently.

With that in mind, gold has gone from about $750 to about $1200 while the market average (S&P500) has gone from about $750 to about $1200 give or take. This says to me that there really hasn't been any action to speak of in the stock market in the past year. So you may have more dollars, but they won't buy you more and in some cases they may buy you less. Was that worth the effort?

Don't get me wrong, there have been some great plays in the past year where some large percentages have been made. On average though, the market doesn't look like a stellar investment, especially for the past 10 years at 0.4% loss over that period. Gold on the other hand, has made about 300 - 400% in the past 10 years. Given the (quantitative easing) inflation being created by the Fed, I'd guess that it will continue that way for the next 3 years minimum.

Paper assets appear to be under heavy, unpredictable manipulation. I recommend hard assets and small profitable businesses with predictable cash flow and pricing flexibility. Pricing flexibility will allow the business to raise prices with observed inflationary effects.

-MikeMark

 

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#32) On May 18, 2010 at 7:43 PM, MikeMark (29.42) wrote:

But I have a few questions for you, GMX.

1) In terms of gold oz per ton which mining company has the best extraction ratio?

2) Which mining company has the highest net profit per raw ton?

3) Which mining company has the current greatest proven reserves?

4) What is a reasonable dollar profit per raw ton? $10? $25? $50? $100? Less? More?

5) What country appears to be the most profitable to operate in? Why?

6) Are there any new developments in mining process that we should be aware of?

7) Where would you consider opening a mine? Why?

I figure it's best to ask an expert. Help me learn.

-MikeMark

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#33) On May 20, 2010 at 7:40 PM, DeerHunter73 (73.11) wrote:

Well your correction finally came 13 months later but never the less it came and in full force. This has been one hell of a correction. Once  Europe the Euro gets there finances figured out the market will bounce back slowly im guessing. and will probably top out end of year around 12000.

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#34) On May 20, 2010 at 9:33 PM, hitch55125 (51.81) wrote:

Looks like you can add another thousand point day. Nicely done.

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#35) On May 23, 2010 at 9:51 PM, DragontoadX (24.51) wrote:

The market will continue to fall in terms of gold... what it will do in terms of dollars is too dependent on policy response to really know

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#36) On May 24, 2010 at 11:11 AM, Formula51 (< 20) wrote:

Opinions at this point?

 Are we making a bottom for another run up or are we taking a break on the way down as we appear to be flirting with the 200 day moving average.....

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#37) On May 24, 2010 at 11:41 AM, dragonLZ (99.38) wrote:

Are we making a bottom for another run up or are we taking a break on the way down

Just a break. I see us go up to DOW 10,800 or so, but then we'll go down below 10,000 (very likely below 9,500). Just my opinion.

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