Stock Capitalist » recession

Short term reversal is probable here

Simon — Fri, 28 May 2010 08:22:10 +0000

In my previous blog post ‘Dow gets close to Feb lows’I mentioned we were due for an oversold reversal. This was a strong move up today so i’m thinking this could be the trigger day. I’m really waiting for the DOW to cross it’s 20 period moving average on it’s 6 month chart, with a large green candle day like this to get really BULLISH, but I’ve already started some ’starter’ positions with options in a few of some really oversold stocks and ETF’s. You can check out my twitter page (www.twitter.com/simonka) and scroll thru to see some of my trades i started last week. I’ll be adding to this list if the above can happen.

If the DOW triggers, then I will be SHORT TERM BULLISH.

I am still LONG TERM BEARISH as i stated in that previous post (see harry dent video), and will be looking for the exit on bullish trades and reversing directionas we near a new hi on DOW.

Trade Safe,

Simon

Dow get’s close to Feb lows

Simon — Fri, 21 May 2010 06:18:21 +0000

We had another large selloff on the DOW today bringing us back close to February lows. Dow also closed below the 200 day moving average. I know i’ve been warning this market is overbought for the last couple months with some of the articles i’ve posted… but my feeling is that we get some massive short covering, and a bounce here soon. Just as the market has been overbought for the last couple months… not now it’s getting to the point where it’s very oversold. Short covering will happen soon, and when it does, we may rally hard close to our old Hi of the year.

Click ’simon’s stock posts’ in the category to the left and scroll down until you find the latest Harry Dent Video. In his latest update he maintains that the big money has only started to sell it’s positions off. Normally that big money likes to sell into a spike, so he see’s this large short covering rally hitting here soon, and a rise to near the top again….. before the REAL correction starts, possibly taking us to a DOW of under 5000, maybe even before December of 2010.

Trade Safe!!

Simon

Market Drops Today… Possible Correction Trigger

Simon — Wed, 28 Apr 2010 02:00:09 +0000

Just a quick note to say that a large selloff happened to day. All major indices breached their 20 period moving average. The last time that happened this strongly was in February. If this is really the trigger, and start of the selloff… then we could be looking at a significant drop. If it was me… I would be looking to lock in long positions profits here to be safe, and looking at some put option strategies to take advantage of a reversal.

Trade Safe.

Harry Dent March 2010 Video market update

Simon — Fri, 12 Mar 2010 20:27:11 +0000

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Is this another false alarm like July?

Simon — Tue, 17 Nov 2009 17:38:54 +0000

Great artice by Chris Rowe. Based on this i’m lightening up a few of my bearish positions and hedging with some bullish ones.

“If you’re like me and just about every trader/investor I know in the market right now, you’ve been looking at one “false market signal” after another, one “whipsaw” after another, and one “head fake” after another.

At the market’s current levels, we’re clearly overbought — no matter which way you slice it. Of course, we can stay overbought for a very long time, and being overbought isn’t enough to bet against the trend.

In fact, at times when the market condition is internally and externally “overbought,” is often when we see the market’s largest advance.

But when we saw the sell signals in the market that came after being very overbought, most of us took action that we know has made us money a large majority of the time…”

ORIGINAL ARTICLE

Enjoy!

URGENT – Market has reversed and bears are now in control

Simon — Tue, 03 Nov 2009 18:09:59 +0000

Last week, 11%of all stocks (net)on the New York Stock Exchange broke through support levels, putting them on sell signals.

I’ll make the importance of this event very simple.

All you have to understand is that, if a stock declines and breaks through a key level, the stock is much more likely to continue lower (because the big buyers who were supporting the price of the stock are no longer there, or the sellers had more stock for sale than buyers had to buy)….

ORIGINAL ARTICLE

Enjoy!

Caution moving forward – NYSE BPI has reversed to “O’s”

Simon — Fri, 30 Oct 2009 06:51:48 +0000

Just a quick market caution… i received a report that as of yesterday morning the New York stock exchange bullish percent index has reversed to “O’s”, meaning that the sediment has changed from a “bullish” stance to a “bearish” stance and the bears have taken control of the market.

The last time this happened was in July, and it turned out to be a false alarm… but more indicators have been triggered this time, and since we are still in crash season I think it’s prudent to be cautious at this point.

If you want to learn about how to trade stocks and options (for free) and use some strategies that work well in a bearish market, click ‘beginning stocks and options’ above for some more info.

Harry Dent October 09 Update (Video)

Simon — Fri, 16 Oct 2009 17:57:10 +0000

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Issues of the Central Banks

Simon — Tue, 01 Sep 2009 07:21:23 +0000

Important excerpt:

“Central banks may find themselves hiking into a weak recovery to quell asset prices, or they might compensate for the weakness in the interest rate and credit channels and allow asset prices to rise but risk inflating another bubble. Central banks could gain some much-needed flexibility by thinking outside the IT box – but whether they will make a dramatic move and switch to a PT regime remains to be seen…”

ORIGINAL ARTICLE

Enjoy!

Don’t bet on the recession being over

Simon — Wed, 19 Aug 2009 18:23:54 +0000

We’ve got an extended economic adjustment ahead. Most probably far longer than most investors presently expect. As always, we’ll take our opportunities as the evidence emerges, with the objective of outperforming our respective benchmarks over the complete market cycle, and an additional emphasis on defending capital over the course of that cycle…..

ORIGINAL ARTICLE

Enjoy!

WARNING: Prepare for a possible market crash in June

Simon — Tue, 26 May 2009 17:21:02 +0000

MARKET WARNING

This is not hype or sales pitch. It’s a FACT. The market could very easily — and probably will — (what every investor would have considered, by historical standards) crash! When we managed money on WallStreet through the ’90s and halfway through the 2000s, this is the kind of market we would lick our chops over! When the market starts to sell off, the very best the bulls can hope for is a 13% sell-off. That would be a mere 50% retracement of the last two-month advance. What’s more likely is at least a swift 20%-22% sell-off. That would be a test of recent (March) lows on the S&P 500. We’ll only know how real the last two months of gains have been when we witness the force of the next sell-off. There are so many things pointing to a sharp sell-off in the very near term future, it’s amazing. The only thing — the very last signal I need to see before becoming an aggressive bear — is a weakening of the internal market. Market internals have been strong. But everything else says to look out below. And you don’t have to sit there, holding the bag, hoping we don’t break the March lows. And that’s very possible, too, so that means a decline of more than 22% is not what I’d call unlikely……..

ORIGINAL ARTICLE

Get prepared!

The Trend Is Your Friend Until the End of the Trend

Simon — Tue, 21 Apr 2009 03:47:00 +0000

A very interesting article!

“Stability, though, as we were taught by Hyman Minsky, leads to instability. The more stable things become and the longer things are stable, the more unstable they will be when the crisis hits, because we human beings learned to trade and invest by dodging lions and chasing antelopes on the African savannah. We now chase momentum and dodge bear markets. We are hard-wired to look around at our circumstances and predict trends far into the future.

We take the current trend and we project it forever. But the one thing we know about trends is that they are eventually going to end. The trend is only your friend until it ends. Trends are notoriously fickle. That stability breeds instability. Calvin Coolidge said in early 1929 that “In the domestic field, there is tranquility and contentment and the highest record of prosperity in years.” The trend ended. “Apres moi, le deluge.”

Now, so what happened in 1929, after this era of stability? The bubble burst and the stock market crashed….”

ORIGINAL ARTICLE

Enjoy!

Are Insurance Companies the next to fall?

Simon — Sat, 11 Apr 2009 19:52:44 +0000

Over the last year, the financial media has focused primarily on the major banks and their solvency issues. We have heard relatively little about the major insurance companies, which were not eligible to participate in federal bailout programs such as the TARP. As I will detail in the following pages, most of the major insurance companies are in financial trouble due to the recession and the credit crisis; some major insurers are large players in derivative instruments such as Credit Default Swaps and Collateralized Debt Obligations which have gone bad. In addition, many property and casualty insurers were dealt a blow by the natural disasters (hurricanes) that occurred last year. Some in the industry predict that if we have another bad hurricane season this year, a number of the nation’s largest insurers will go out of business entirely.

The publicly-traded insurers will be releasing their required 10-Q financial statements for the 1Q in the next few weeks, along with their 10-Ks for all of 2008. I am told that these reports are going to look very negative on balance, and this could be quite disturbing to the financial markets including stocks. As we go along, I will tell you specifically what to look for in these financial reports to judge the credit worthiness of your particular insurer. This may be one of the most important and timely E-Letters I have published….

ORIGINAL ARTICLE

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Dent, Prechter and Others Warn that the Worst is Yet To Come

Simon — Wed, 25 Mar 2009 05:04:02 +0000

Special thanks to Alan for forwarding me this article.

Excerpt: “Once again warnings and predictions are being put forth about the next crisis to befall us and this time round it behooves us to pay more attention and make sure this time that we are better positioned to survive and prosper whatever comes our way. Below are major market forecasts and investment advice based on drastically different analytical styles (demographic, fundamental, technical and socionomic) from forecasters who have been there, done that successfully in the past and are once again forecasting what their research indicates is in store for us over the next decade. It should be ignored at our peril….”

ORIGINAL ARTICLE

Enjoy!

Lessons learned from Japan’s great depression

Simon — Wed, 11 Mar 2009 00:26:09 +0000

“In many ways, Japans long deflation has been different from the United States in the 1930s. There have been no breadlines – or 25% unemployment.

Yet an 82% decline in the market over two decades is devastating even to investors with the longest time horizons. Bear in mind, this example excludes dividends. But still, this is an astonishingly poor performance. What can we learn here?…”

Original Article

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