Hasib

Exploiting the Downside of the Markets

Bear market over by March?.. LOL


On Nov 20 07:50 AM Andy Zaky wrote:

> LOL. This article is late to the game man. The S&P500 is getting
> close to the previous bear market lows and the NASDAQ is approaches
> rock bottom prices that we haven't seen since the tech bubble collapse.
> The risk reward for shorting here is way off balance. There's maybe
> a case to short AMZN here with a P/E that is twice that of AAPL,
> GOOG and RIMM. But shorting AAPL and RIMM here is a dangerous game.
> GOOG might make for a good short as the market is laboring under
> the belief that on-line advertising has disappeared. How long this
> could be kept up is anyone's guess. GOOG and AMZN are maybe shorts
> if you're in for a very quick trade. But I wouldn't even think about
> shorting AAPL or RIMM. That's just stupid. AAPL has been steadily
> outperforming the market over the past few weeks and while the NASDAQ
> continues to make new lows, AAPL has yet to break its low set in
> the first week of October. RIMM has been on fire as of late. Shorting
> these stocks would have been advisable during the first week of October,
> but doing so now is a disaster waiting to happen. If history has
> taught us anything, bear markets end with inverted head and shoulders
> and when the market rebounds, it does it fast and furious.
>
> Here's how the S&P, NASDAQ and DJIA bottomed in the 2001-2003
> bear market:
>
> stockcharts.com/h-sc/u...=$SPX&p=D&...
>
> stockcharts.com/h-sc/u...=$INDU&p=D&...
>
> stockcharts.com/h-sc/u...=$COMPQ&p=D&am...
>
> Notice how each of them ended their respective downtrends with an
> inverted head & shoulders. Also, the 74' bear market ended in
> the same manner. Inverted head and shoulders.
>
> Now take a look at this bear market. I see a distincted left shoulder,
> and a head in progress.
>
> stockcharts.com/h-sc/u...=$COMPQ&p=D&am...
>
> Shoulder at 1,542.45; head being made right now; and I imagine we
> see a massive rally in December as hedge funds try to cut their losses
> on the year. I could see the NASDAQ testing the neck line at 1700.
> Then sometime in January, I see the NASDAQ putting in a right shoulder.
> If the economic data starts look positive, this bear market will
> be over by March. And you want to short here? You're playing with
> fire.