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StatsGeek (95.51)

Bear Capitulation = Market Top?

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November 13, 2009 – Comments (17) | RELATED TICKERS: PEO , NS , RUS

Everyone who follows me knows that I'm a permabear.  I'm still extremely confident that we haven't seen the worst of things for the economy or the market.

However, lately I've been feeling defeated by a market that just insists on going up.  So for the short term, I feeling like capitulating.  After all, the market is screaming, "I'm going up, STUPID!  Isn't the path of least resistance obvious?"

In my experience, whenever I reach the point of considering surrender, it is shortly after that when the market decides to prove that I was right to begin with.

Based on that, there's a good chance we're near a top.

 

17 Comments – Post Your Own

#1) On November 13, 2009 at 12:06 PM, kdakota630 (99.93) wrote:

My call is that the next leg down will be when the Dow hits between 10,500 and 11,000, possibly in the spring.

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#2) On November 13, 2009 at 12:07 PM, starbucks4ever (99.55) wrote:

But you haven's capitulated yet, so I think we still have some substantial upside from here :)

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#3) On November 13, 2009 at 12:31 PM, IBDvalueinvestin (99.48) wrote:

Bear capitulation = Start of new bull run.

Bears have not capitulated yet, when everyone is screaming for Dow 15,000 then you know the top is in. As long as people are saying we are at top (Bears wishful thinking).

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#4) On November 13, 2009 at 12:37 PM, RainierMan (94.93) wrote:

Since you don't fully believe in your capitulation, I don't think this will work as a contra-indicator.

 

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#5) On November 13, 2009 at 12:45 PM, Counterparty (< 20) wrote:

There's still too much money on the sidelines and just look at the increasing M&A activity.

They estimate we're still talking about close to a trillion of private equity capital waiting to be put back to work.

Until interest rates go back up to 3-4% there's really no other place to put your money yet then the stockmarket.

We've had two attempts at a correction last month, but people buy on the dips, like most on this forum.

Especially with some dividends still between 7,5 - 12,5%

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#6) On November 13, 2009 at 12:49 PM, StatsGeek (95.51) wrote:

Good points from all of you.  I don't think today is the top but I think we're approaching it.  I can almost sense a bullish giddiness in the market right now.  That is the time to start being cautious.

It's just a question of when the next shoe drops.  No one knows when that will be, but it is 100% clear that it will eventually happen.

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#7) On November 13, 2009 at 1:01 PM, EV38 (99.89) wrote:

I don't see bullish giddiness. Why? Because my CAPS score is still far off from 11K+ despite the DOW being back to where it was when I was at 11K. Meaning the "safe" stocks I don't own or short in my portfolio are doing well while the riskier stocks I'm longing are trailing atm. To me that's a bullish sign from cautious increases not a bearish sign from giddy bullishness 

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#8) On November 13, 2009 at 1:03 PM, jlmjlm77 (99.74) wrote:

My guess is the S&P floats in a range from 950-1250 until congress is reelected in 2010.  Then a post election spike before a potential move down, however the move down may be much less in "nominal terms" than inflation adjusted terms.

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#9) On November 13, 2009 at 1:03 PM, StatsGeek (95.51) wrote:

No one noticed my tickers?

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#10) On November 13, 2009 at 1:06 PM, kdakota630 (99.93) wrote:

I did, StatsGeek.  Good work.  Sorry for not mentioning it sooner.

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#11) On November 13, 2009 at 1:06 PM, outoffocus (26.79) wrote:

Lol Statsgeek. Good tickers.

I guess I've capitulated too because I am very bullish now....on commodity and foreign stocks. =)

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#12) On November 13, 2009 at 1:07 PM, kirkydu (95.94) wrote:

That is exactly how I explained my feelings to somebody yesterday.  I'm a follower now.

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#13) On November 13, 2009 at 1:18 PM, hhasia (62.73) wrote:

This might be off the wall, but I look at this rally like 1938. That was 61%. That equivalent would be an S&P 1150 to complete.  The next leg down came in the first 3 months of 1939, down 23%. Then another spring summer up trend and sideway move.  Although there are significant differences in the environment, human nature has not changed.

But the thing that should be frightening is the million's of homes up for rate adjustments. ( More than the number of sub prime) Plus more people out of work than when the first round hit. It could get heart stopping bad. A clear indicator for the banking holiday when the cherry blossoms are in bloom.

HHASIA

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#14) On November 13, 2009 at 1:25 PM, kdakota630 (99.93) wrote:

hhasia

I don't think that's off the wall at all.  The bounce we've had from March is percentage-wise almost to the same point as the 1930 bounce from the '29 crash.

To hear some people talk they're scrambling to get into the market because they're afraid they've missed the bottom.

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#15) On November 13, 2009 at 2:56 PM, kennyboy81 (< 20) wrote:

Happy to hear these comments...I haven't gotten into the market yet. Content to wait for the correction while I finish paying off my credit card and educate myself on investing.

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#16) On November 13, 2009 at 11:25 PM, HarryCarysGhost (99.72) wrote:

Kennyboy81 that is an excellant strategy. I never invested a penny until I was debt free (apr 2008)

also I  invested in increments so I was able to take full advantage of the crash.

Fool on.

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#17) On November 19, 2009 at 4:54 PM, rosemanjhk (52.06) wrote:

My portfolio is heavy in commodities right now.  I agree the second leg of the infamous "W" is looming out there.  I got in at the bottom in early 2009 and am up 70% right now.  I would like to consolidate that and get cash ready to buy in at the bottom of the next dip, which my gut feels could be late 2010/early 2011......

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