GoodVibe Market Vibes – Ringing the bell at the top
Notice: This blog has more than 35 charts, which can be viewed by clicking here.
Major tops are made quietly while major bottoms are made violently. At bottoms, bears are loud, cocky and frightening. At tops, bulls are blind, aggressive, and careless. Last March we witnessed a sharp reversal from the bottom for full two weeks nonstop. Now, we see the quiet topping that is taking us more than two weeks so far and counting.
No surprise here. It brought to my memory the not too old event in October 2007. In October 10, 2007, the market dropped quickly to reverse back up fiercely on October 22. The NASDAQ composite even made a new high in October 31 defying the rest of the indexes! Many threw the towels, capitulated to buy, and claimed that this bull is here to stay. “Let us buy every pull back from now on to DOW 36000!”, they said! From this quiet day, slowly but surly investors started to slide down the slope of hope all the way down to the bottom of disappear while hoping, and wishing for someone to stop their capital bloodbath.
If you, the small investor who is dancing among the elephants trying to outsmart them, forgot quickly and as usual that point in the abyss where the sky was falling, allow me kindly to remind you that this is the moment you should be fearful not greedy. The time to be greedy has passed you away. Today, passing a risky opportunity is far less if nothing comparing to risking your capital chasing the latest stock mania, the gold miner rush, or the latest tip to get in or join the game in fear that this train will pass you by and will never return if you don’t hop in. Even if this to happen all you will miss is an opportunity, which is always easier recovered than losses.
I am not going as far as to call those who urge you to get in the game (whatever that is) are bad people. Some have your best interest at heart but most not. Let us also remember that the way to disaster sometimes is paved with good intentions.
I’ve been charting our way to S&P 1080 for the last two months trying to ring the bell at the top as I did in the bottom. Again, I come to you with my last major call in CAPS to ask you urgently to halt your involvement entirely in the stock market for at least the next four weeks. Don’t do anything. Don’t short anything either if you don’t feel comfortable with shorting but make sure if you don’t want to sell your current long positions for whatever reasons to at least hedge them aggressively.
Although since last week I favored a small and minor upside of more than 1080 TOP, I don't recommend going long as I said on Sep. 23; "Buying now is exactly like shorting the market below 700, you might bask in the sun for a day or two but will end up with a nasty sunburn for weeks, months, if not years to come."
Will I be wrong? Sure I can! I can’t read further in the far future and I am telling you no one can but I can tell you that during or by the end of the next 180 days chances are great that the following will come to happen:
1. The dollar will rise from today’s low in its way to make a new high. All other currencies will fall. Chances the Yen will be the least loser. The Euro and British pound will be the big losers.
2. Gold and silver will not post a major advance if any and will fall in its way to make a new low.
3. Stocks will retreat from S&P 1080 and will make the largest retracement since the start of the March rally. All beta stocks will be crushed. Names like AAPL, RIMM, AMZN, GS, GOOG, BIDU, etc should never approached with a ten-foot pole.
4. Junk bonds will be hammered to the bones.
5. Oil, Coal, Copper, Aluminum, and every industrial metal are going down.
6. If no increase in interest rates, a lot of Fed liquidity will be drained from the market.
7. Consumer confidence will fall and social mood will start to sour again though Christmas might safe peacefully to bring the real deal in 2010.
8. I will double the value of my fantasy portfolios (see links from my website) and my murdered and ill manged CAPS (which I have no excuse whatsoever for reaching these low levels) should reach 5000 to 6000 points with accuracy above 83% (for those who care about CAPS points).
To check out more than 35 charts and more analysis of major domestic and foreign indexes and sectors as well as many indicators, click here. http://www.iamgv.com/gv/2009/10/charts-talk.html
Last note: I don’t ask you to follow any of my trading style or abandon your trusted investment analysis and methods in favor of my trusted tools. It was never my intentions. My goal is and was always to expose you to a different way of approaching investing and trading and simplifying a complicated matter such as Technical analysis in hope you get interested in learning them. All I did was to demonstrate not to prove myself right or being smarter than anyone else. On the contrary, I am a simple guy with normal brain power as I said from the beginning. If I made it, most people can and many of you are way too smarter (in your own respect) than myself.
After making my case clear that TA is at least a valuable tool to learn, I will ask you to pick from where I left you today and start learning at least the basics so you can use them before risking your hard earned coins. We built a very positive and productive community. Come join us where we will show you the way. We will not tell you what to do but we will show you how you can do it and what do you need to learn. If you would like to take charge of your financial future, come join us. Click here or visit us - http://www.iamgv.com/gv/lounge.html
I also would like to thank CAPS team especially TMFJake for making this place the best financial site I know of. My appreciation for all the great Fools I met here and the friendship I developed with many of you. Thanks for your patience and kindness during all that time I’ve been here in CAPS as well as taking the time and energy to read what I had to write and hopefully benefited from it. I also hope that my shortcomings were far and few. For those who I didn't come across as their cup of tea, I wave you goodbye as well and wish you all the best.
As usual, I wish you everything you wish for yourselves and much more.
S&P 500 current 1076
PS. I will keep documenting my market calls through CAPS though with far less or no details, which will give you an insight to where I think the market is going and my website is always open for you at anytime. www.IamGV.com
Still, if you would like to know the details of my trades, click here to rec that blog.