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starbucks4ever (89.90)

I also want to call the top



October 20, 2009 – Comments (13)

Surely, I also want to claim my 15 minutes of fame. Why should GoodVibe alone have all the glory? My call is not going to be a cryptic conditional statement with 26 shades of meaning. It will be a clear statement in plain English that has one, and only one meaning. My position is unchanged from Jan 1, 2009. As I stated then and repeat now, I continue to place the top at Dow 14,000.

Why 14,000 and not, say, 13,000 or 15,000? Very simple: 14000 is just where we came from. So it's only reasonable to expect that once GS solves its temporary problems having to do with eliminating rivals Bear Stearns and Lehman and once the leverage of these financial players is again applied to the market, this time under the GS brandname, the resulting valuations should also end up at the same level they reached in 2007. But once this level is reached, it will be natural for the market to take a breezer because a) it's a major milestone, b) there is a memory of the historical fact that the market went down from this level, and not up, and c) the multiples are overstretched at this point so further gains need to come from additional earnings growth which is unlikely. So the probability theory says we should expect a Great Leap Forward towards 14,000 followed by a correction. I don't insist that 14,000 must be the top. There is nothing wrong with 13000 or 15000, or some other number, but my bet is on 14,000.

By the way, the next several days should be interesting because it will be the moment of truth for my respected rival GoodVibe's call for "The Real Top" which should take place around S&P 1100. We'll see shortly if technical analysis can trump fundamentals and psychology, and whether in fact looking at earnings and liquidity is a more productive occupation than drawing channels, resistance lines, and Fibonacchi retracements. GoodVibe's call for TRT was contingent on the 1115-1126 resistance holding, which looks doubtful after the earnings report from Apple. I expect this resistance line to be broken, possibly as early as this week, forcing the Elliott crowd to trash their old count and call a new TRT, this time the one that is closer to 1450 than to 1100. And what do I think will happen next? And next...they will be basically right this time around, or at least get within the same area code of the correct answer. At least I hope they will. I really want to have such a formidable theory on my side! Is there really no way to tailor-suit EWT to produce something close to 14,000? It would be really nice of them if they could. I expect the next few months will be filled by some extensive work with the charts. A few extra zigzags on Wave 5, an alternative count or two, a couple of "if-then-else" loops, a sprinkle of tea leaves, one standard deviation from the top of wave 5 of (V) of {5}, or whatever is the right order of Roman and Arabic literals, - and here comes the real Real Top, within a stone's throw of 14,000 which of course was never anything else but the reversion to the mean!

13 Comments – Post Your Own

#1) On October 20, 2009 at 12:51 AM, Starfirenv (< 20) wrote:

You forgot reading "animal entrails", a much underweighted factor in any complete analysis.

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#2) On October 20, 2009 at 1:18 AM, streetflame (29.33) wrote:

I don't think you are right.

At the end of the day weakly supported prognostications are boring.  It is more interesting to ask: How do you plan to make a lot of money if things go your way, while not losing much if they don't?

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#3) On October 20, 2009 at 1:18 AM, fmahnke (65.91) wrote:

I'm not a TA guy (at  least not exlusively) and don' t make market calls that look out much past a week,  However, I'll bet GV is right about this one , I think the 1125 holds because:.

1. When the DOW hit 14 K - Unemployment was maybe 6.5%, healthcare insurers were expected tp make  money, Financials employed more leverage and had less bad loans.  The fundamentals have changed and 0% interest is not forever.

2. EWP may be nonsense to many.  But alot of people pay attention to it and will trade accordingly

3, Earnings may be good, but 2010 outlooks remain murky, One thing about earnings seasons that I've noted is that market leaders like AAPL get out early and less visable companies follow.  I expect some ugly bank numbers, and many cap intensive businesses will say "we donlt see stimulus funding coming yet."

Of course only time will tell .  One thing about calling tops is that everyone is right eventually, you just have to wait long enough.

My call is that we test 1000 before we see 1200 and that is happens in 2009

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#4) On October 20, 2009 at 1:35 AM, KamranatUCLA (29.40) wrote:

I think this is the top. As joblessless become epidemic and longer, some stupid workers who had no business to be in stocks anyways will cash out to survive.

There are many inactive mutual funds, stocks, etc...that are just out there ot be cashed.

People are running out of money so they will cash what they own in mutual funds and stocks.

In addition, because of inflation in food prices many elderly who receive SS will also cash their mutal funds and stocks.

I think we will be back to 7000 levels and until we don't hit and stay there for a while no real recovery will come.

Many business have to still declare BGP (borders) sear, and 1000s more companies who have very little sales, tons of debts, and no plan for future.

We need some real change in the way we think. Investing in stocks of older, planless companies is like investing in Compact Disks. Makes absolutly no sense.

When was the last time you bought a home, or you bought clothng at a mall, or you bought anything substantial at a supermarket.

Anyone I know is laying low and just shopping at costco for living essentials.

Costco and Starbucks...i just like those 2.

I don't even like staples like McDonalds anymore. Their junk food is now to expensive and people are more aware that their food is unhealthy and causes cancers and all sort of problems, not to mention is nasty ( serving over 1 billion burgers made of utility beef)

Google utility beef and u will never eat a hamburger at McDolnalds again.

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#5) On October 20, 2009 at 1:36 AM, Starfirenv (< 20) wrote:

Streetflame, agreed, if reversion to the mean is the mantra here, why would the extreme top be the benchmark?
P.S. Big fan. 14500 could happen (as corrupt and manipulated as this mkt has become), but at that point I will be an Ultra C myself.

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#6) On October 20, 2009 at 1:48 AM, Starfirenv (< 20) wrote:

Kamra nat-- Can I go back to Iran with you? When I was in college I knew this French girl. I never saw hairy legs and armpits on a woman before. Now I love it. Is it true the hairiest wemen are Irani? I'm pretty serious. I will marry to get some.

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#7) On October 20, 2009 at 2:06 AM, checklist34 (98.66) wrote:

i am a TA guy.  as in i'm long TA, which did nothing for the first 5 or 6 or 7 months I owned it and, I see today, is now a multi-bagger.  Happy days. Its still maybe cheap, its still REALLY cheap if they can turn around to a profitable debt-paying-down condition one of these quarters.

good post, rec from me.  I don't buy ito GSconspiracy theories, ... i'm just not a conspiracy theory guy.

But calling tops is dangerous.  Has it ever, in human history, or at least in american stock market history (world stock market history?) been a good bet to bet against a market that isn't up in 12 years OR is down 30% in 9 years?  I wonder.


I think my considerable hedges...  bullish as hedges go, but still hedges (which means i lose if things go up), largely born not on a belief that the S&P or, especially, my holdings are overvalued, but largely born on the belief that we were due for another correction or dip of sorts...  may fail.  Such is life.  I bet most of the proceeds from the hedges on RJET and i'm comfortable with that, and in that light I may still well win in the long run.  

One can never outsmart Mr. Market consistently.  Not me, not dougie kass, not warrent buffet.  

If we went to 14000 I wouldn't be surprised.  If we went back to 9000 I wouldn't be surprised (and i'd profit handsomely on the hedges).  

Come what may, I'm in the market baby, bring it on.

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#8) On October 20, 2009 at 2:52 AM, starbucks4ever (89.90) wrote:

"Has it ever, in human history, or at least in american stock market history (world stock market history?) been a good bet to bet against a market that isn't up in 12 years OR is down 30% in 9 years? "

with due respect, there also never was a time in history when the stock market was as insanely overvalued as in 2000, so I can at least understand the bears' argument, though not agree with it.


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#9) On October 20, 2009 at 9:11 AM, RVAspeculator (28.35) wrote:

One of these many goodvibe top calls is going to be right and I don't think it is going to be 14,000 on the dow.   Not 800 (ides of march), 850, 888 (dramatic wave 3), 950, 1000, 1075 (last week) on the S&P but maybe 1100 (the top call for this week).  Eventually stocks will go down again.  

And many bears will have "called the top"   :)  

 I quit trying around 900.

The top is like fight club...  we bears shouldnt talk about the top.  :)



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#10) On October 21, 2009 at 11:44 PM, starbucks4ever (89.90) wrote:

So far, GoodVibe has been spot on. Let's see what happens next...

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#11) On October 21, 2009 at 11:59 PM, outoffocus (23.89) wrote:

Why should GoodVibe alone have all the glory?

First of all, Thehypnotoad gets all the glory. 

Second, if everyone is calling the top at the same time how will I get through.  Its like calling a radio station for crying out loud. 

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#12) On October 22, 2009 at 12:08 AM, booyahh (< 20) wrote:

Nice !!!

Finally someone who keeps it simple! Too many people overthink, and overthinking is your enemy when it comes to investing.

The market always tends to return to it's previous high.

So yes, the Dow will return to 14k over the next few years - after which it may go 1k or 2k higher to 15-16k.

And then it'll crash again. But for now we're ok !!!

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#13) On October 24, 2009 at 1:55 AM, HarryCaraysGhost (72.43) wrote:

Can only comment on what I am doing.

Selling speculativive stocks all the way up to 11,000.

Holding long terms.

If there is a pullback to 8000, will buy more of long term.

If market goes to 14000, still have my longs so either way I win.

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