Recognizing the Importance of Market Timing

[excerpted from Bill Cara's Week in Review]

I have not ever had so many doubters in my “trader wizdom” as happened a week ago, but by the time it came around to trick or treating last Friday evening, the U.S. equity markets had the biggest weekly gain since 1974. I felt vindicated.

Moreover, last week marks the first time in history that the DJIA, S&P 500 and NASDAQ indexes all lifted by more than +10% in a single week. Additionally, I was resolute in my belief that Energy and Goldminers would be rally leaders, and as it happened, XLE was up +17.4% W/W and the Goldminer industry stocks (GDX) jumped +21.7%.

A week ago, during very difficult circumstances, I wrote, “The thrust of this Week In Review will be that, pretty soon, we’ll all be in the money, riding the Bull. All that matters is that we choose the right Bull to ride… This week was a crusher to most people. I empathize. You know that. But if misery loves company, don’t go looking for it here… Have a good day. There will be better ones ahead. From my home, looking across the ocean, I can see them!”

Thank goodness the market worked my way. I will admit I was starting to get testy and sarcastic with the Doubting Thomases. More relevant to you all today is that: (i) your portfolios are beginning to recover, which, I believe, will continue to be the case, and (ii) you now see the importance of market timing as well as trading in the shares of high quality companies.

Comments

[leh:]

Nice call Bill. And, yeah, the miners still look golden (pardon the pun) and for that matter silvery here <g>. You and are on the same page, and probably studying the same washout lows in this sector last Tuesday and rubbing our palms. Negative sentiment towards gold and silver has been pretty extreme as well, so have to think most of the weak hands have been flushed out. We'll see if the big money liquidations are done soon enough.

2008 Nov 03 08:50 AM

[dr.doolittle:]

bulls and bears make money, and I smell bacon!

2008 Nov 03 09:01 AM

[drone:]

Last week Bill told us not to listen to Goldman's commodity forecasts. This morning they put Boeing on their "conviction sell list". Boeing stock went up so it appears people are getting the message on Goldman. I sold some Boeing calls and made a few bucks, thanks Goldman.

2008 Nov 03 06:02 PM