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starbucks4ever (98.05)

The magic number 57.5% is reached

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September 14, 2009 – Comments (8)

57.5% was the largest nominal loss for the bulls on March 9. This figure discounts dividends and assumes that you bought S&P at the peak and sold it at the trough. Today's 1050 on S&P represents a 57.5% nominal loss for the hypothetical short trader who sold S&P at 667 and covered today (again, discounting dividends). A silent tragedy unfolding stealthily before our eyes, without drawing a slighest attention from the media. So many people ignored the danger of shorting, it couldn't end well.

8 Comments – Post Your Own

#1) On September 14, 2009 at 5:20 PM, SolarisKing (< 20) wrote:

rec

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#2) On September 14, 2009 at 5:24 PM, jason2713 (< 20) wrote:

Well I started shorting in 2nd week of aug when the dow hit 9300-9400.

i've lost roughly 8-10% so far.  It sucks.  The correction I thought was going to happen never did develop except in the first days of Sept, should have sold then eh?  I would have been up 3-4% :(

Oh well.  I still think a correction is due.  This market is a house of cards waiting to be blown down.  

 

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#3) On September 14, 2009 at 5:31 PM, starbucks4ever (98.05) wrote:

"This market is a house of cards waiting to be blown down. "

The truth is, we'll never know. If GS decides to drive it all the way to 14000 and crash it then, many short traders will jump out of windows before the correction arrives. 

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#4) On September 14, 2009 at 5:35 PM, jason2713 (< 20) wrote:

If the market goes to even 11,000...I think a lot of people will call BS.

I just don't buy the fact that this is a fairly valued market.  It's still contracting, while the dow/s&p/nasdaq continue to rise.  Makes no sense.

How we are expected to get GDP to be positive to the effect of 3-4% in Q3 and Q4 is beyond my comprehension when basically every tax receipt in every state has declined even in July and Aug by roughly 3-5%, and to compound that problem, gov't comprises of 50% of GDP, and they are slashing expenses along with the private sector.  S&P continues to climb, yet their  revenues are off 16%.  How do we grow 3-4% if everything is still declining?  We are still contracting, not expanding as a nation.  It's all smoke and mirrors.

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#5) On September 14, 2009 at 7:05 PM, awallejr (75.50) wrote:

I think people are discounting the stimulus.Yes tax receipts are down but Congress handed out billions to the localities.  So short term GDP can inch up.  It is what will happen come next year that will be more telling.  And if you see even an inkling of increasing revenues generally come next two earnings quarters, market will rise even further.  Not to 14,000 like Zloj predicted tho ;p

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#6) On September 14, 2009 at 7:34 PM, Sozurmama (23.36) wrote:

i dont fear the "correction" so much. i dont buy a stock unless im confident that its undervalued.... so if it drops more, its only a better deal.

i do own a small chunk of sds as a safety net. yes, it's losing value, but my longs easily outpace the loss.

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#7) On September 14, 2009 at 8:04 PM, starbucks4ever (98.05) wrote:

awallejr,

I hope you understood my meaning correctly. I am not saying that you must buy now, apply triple leverage, and wait for that 14000 top :). But this number stikes me as the most likely top. In other words, if you asked me to choose between 10000, 10500, 11000, 11500, ...19500, 20000, I would choose 14000. But of course any ride to that hypothetical 14000 should be taken with zero leverage, and with multiple hedges. After all, let's not forget that GS could have us revisit March lows tomorrow if it chooses to. 

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#8) On September 14, 2009 at 8:13 PM, awallejr (75.50) wrote:

Oh I don't knock you for the call, tho I think it a tad optimistic.  And one day we will hit that number again, I just can't say when.

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