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goldminingXpert (29.55)

This Rally

Recs

40

March 23, 2009 – Comments (18) | RELATED TICKERS: L

will go on longer than you expect. It will go on until a large number of people believe that the bottom is in and a new bull market is underway. While the economy isn't finished declining, the bulls-in-waiting will come from the bulwark proclaiming that the stock market is a forward indicator. At this point, calmly join me in selling your stocks as quickly as possible and buying puts on any stock with a ticker symbol. But for now, either hold your stocks or patiently wait in cash until the new bull market blather spreads throughout the masses. Too many people were trying to short the S&P at 800 last week. Wait until the bears are beaten back and then pile back in on the short side. This is not a new bull market, it is merely a bigger bear market rally than most--enough to hopefully scare you senseless if you thought shorting stocks in a bear market was easy. That is all.

18 Comments – Post Your Own

#1) On March 24, 2009 at 12:09 AM, StatsGeek (29.31) wrote:

We don't always agree, GMX, but this time I'm with you.  Please ring a bell when you think the market is near a top!

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#2) On March 24, 2009 at 12:17 AM, motleyanimal (83.72) wrote:

Agreed about being cautious and patient. Anybody in it should be trading it and maintaining a good sized cash position. I will only hold energy and commodities for any length of time. It is still a bear market and upside will be limited to maybe S&P 925, but I don't think we see much more downside than S&P 700 again. It's a range I can live with.

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#3) On March 24, 2009 at 12:46 AM, alstry (35.88) wrote:

Do you really think the spector vectors can blow thorugh a growing physical gold layer on the convex reflector?;)

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#4) On March 24, 2009 at 12:49 AM, cclogic77 (25.52) wrote:

As I don't have very much actual money (college student with student loans, sigh), I can only play the market on caps. Regardless, it is still quite entertaining, challenging, and time-consuming. Which I suppose is a good thing, as I still have much to learn (but I really could use capital sometime in the next year or so, when we really do reach a firm bottom for this bear market!)

I feel like you are right GMX, alot were crying it out in pain as the S&P 500 plunged higher. I myself piled on some shorts at least several days too early... The bulls do have some steam yet, and more are coming out to join the ranks of this rally. But I question how long the market can sustain multiple days in a row of 4%, 5%, and 6% gains... I don't have much history with this stock market, this is a rally of unusual proportions isn't it?

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#5) On March 24, 2009 at 1:14 AM, motleyanimal (83.72) wrote:

Alstry,

The spector vectors can blow through a growing physical gold layer on the convex reflector, but only when the turds in my cat's litter box align in an ascending double inverted jockstrap pattern. ;)

I've also noticed I get better results when they eat Science Diet food.

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#6) On March 24, 2009 at 1:57 AM, kdakota630 (29.76) wrote:

goldminingXpert

Are you willing to make any predictions as to how long this rally will last, or where the S&P well end up before heading back down?

I wish I could find where we discussed this before, but I guessed (and completely mistimed) the rally we're currently experiencing.  I do remember saying that it would last until March or April (see how bad my prediction was?) and that I wouldn't be surprised if the S&P hit 1,100.  At the time I said that, I think the S&P was around 800.  Had this rally happened then, my prediction actually wouldn't have been that far off at all.

That being said, I'd be surprised if this rally went much further or lasted more than another week or so, which is why I value your opinion here.  Your timing seems to be way better than mine.  In fact, if history is any indicator, the fact that my prediction is quite different from yours almost guarantees that you're probably going to end up being correct.

So, any thoughts?

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#7) On March 24, 2009 at 2:06 AM, QualityPicks (33.85) wrote:

I say this rally will only last long or go far IF things are actually going to show some improvement or stabilization (before resuming downwards IMHO). With so much stuff in the last few days that is a possibility:

1. Geithner's plan.

2. Mark to market rule adjustments.

3. Fed buying treasuries and toxic assets.

4. Banks are now profitable.

5. Obama's stimulus plan kicking in. 

After reading floridabuilders last blog, I say #1 is probably better than nothing, but not good enough for the banks. #2 same thing. #3 Sucks, its immoral, but will certainly reduce deflation. #4 Is a big lie. #5 Will help but what happens after the stimulus is gone?

So I don't know if this will last long, it has some potential, but in the end (a few months to a year from now) it should fail miserably. 

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#8) On March 24, 2009 at 3:44 AM, awallejr (81.20) wrote:

I said this in a couple places, April SHOULD be an up month, then selling pressure begins, except oil and commodities which should run a few months longer.  By Sept/Oct we should hit rock bottom since once the market starts to tank people will sell hard, finally giving this market the capitulation pundits keep crying for.

This is from my crystal ball, take it for what it is worth ;p

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#9) On March 24, 2009 at 10:54 AM, beatle2bailey (< 20) wrote:

I will see you guys at the top in Sept/Oct.  Just like 1975 all the positive indicators are now in place, consumer confidence way up, housing prices firming, initial claims subsiding.

The ride will be swift and steep, leaving many in the dust. 

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#10) On March 24, 2009 at 11:09 AM, goldminingXpert (29.55) wrote:

Are you willing to make any predictions as to how long this rally will last, or where the S&P well end up before heading back down?

I don't have a good read on this one. Watch my market timing profile GMXmkttiming to see when I make a decision that the top is in. This move is difficult because it is A) so news driven, and B) features wild moves in currencies and gold. However, I think shorting here is a bad idea. That's all I can really safely conclude at this juncture.

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#11) On March 24, 2009 at 11:55 AM, StatsGeek (29.31) wrote:

I expect a nauseating drop at some point, and there will be no warning.  And no chance to use stops to avoid big losses if you're long.

My advice is to buy long-dated put options with money you are willing to lose.

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#12) On March 24, 2009 at 12:17 PM, goldminingXpert (29.55) wrote:

yes, but not yet. The VIX will fall more first.

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#13) On March 24, 2009 at 2:02 PM, jamasony2 (< 20) wrote:

"Wait until the bears are beaten back and then pile back in on the short side. This is not a new bull market, it is merely a bigger bear market rally than most--enough to hopefully scare you senseless if you thought shorting stocks in a bear market was easy."

 

I lost about 9% of my capital on this rally on overconfident poor position sizing, beaten back scared senseless bear here.  I'll be more careful in the future.

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#14) On March 24, 2009 at 3:58 PM, AnomaLee (28.64) wrote:

will go on longer than you expect

You mean like after all the other bear rallies?

i.e. (March 08 - July 08) or (Nov 08 - Feb 09) 

Yesterday, I got stopped out intraday before the afternoon rally. All the TA junkies came en masse. So, we've entered a new range bound, but after yesterday's big rally I don't even need to look at a chart. I'm going to count to five(five trading sessions) and enter a solid short position. I wouldn't be surprised if we see a massive drop[more than 3%] almost exactly 4 sessions from today. 

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#15) On March 24, 2009 at 10:49 PM, dexion10 (27.74) wrote:

Here here.

 

short some refiners why you are at it :-)

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#16) On March 25, 2009 at 9:24 AM, MrSucrose (< 20) wrote:

Some of the TA is saying 840 is the next resitance level, but I could easily see it blowing through 840.  I went in on some SSO near the close yesterday...we will see.  I guess I am confident until 840 and after that I am going to play it really close to the vest.

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#17) On March 25, 2009 at 10:34 AM, FleaBagger (28.77) wrote:

This is good stuff.

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#18) On March 30, 2009 at 2:02 PM, tquill (29.13) wrote:

I wonder if the automaker news will end the rally a bit early?

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