klarsolo

Why This Rally Will Continue

Sentiment check: 1) count how many people make fun of bullish articles on Seekingalpha. 2) count how many thumbs up these people get for their bearish comments. That's all you need to know to see how the smart money on seekingalpha is currently positioned.

Are You Buying This Rally?

Don't forget to factor in the insane bubble in valuation back then. The market decline wasn't so much a result of GDP shrinkage but more because tech stocks were insanely overpriced.


On Jul 31 09:32 AM Schweizer wrote:

> After the last recession ended in 2001 the market fell almost 40%
> more over the next 16 months as the unemployment rate kept rising.
> Unemplyment rate topped in 2003 and the market bottomed, and quess
> what, the peak unemployment rate was 6.25%! This time it could be
> double that.
>
> Rally on sheep.

Are You Buying This Rally?

Human nature pretty much guarantees a retracement. Anything that goes up rapidly makes people nervous because all of a sudden they're sitting on huge profits. Anything even remotely scary will make them want to pull the trigger. And our economy at the moment is still shaky enough that the probability of further scary news is close to 1.

We will see a retracement of some sort. But even if we move up from here today, the probability that you'll get a second chance to buy at today's levels is very, very high.


On Jul 31 09:03 AM Blake_ca wrote:

> I agree 100% with all of the postings on this thread that the market
> is overbought. It seems all of you (including me) are expecting a
> sharp pullback; however, that's exactly what scares me into thinking
> the market will possibly breakout -- to the upside, and go higher.
> All of the professional minds think it's going to correct, so of
> course, a contrarian point of view says it's going up.
>
> Whenever I feel certain of something (the pullback) that everyone
> else is also certain of, we are usually at that point where contrarian
> movement kicks in and the market explodes the other way. For example,
> in my mind, I simply can't see ANY way the market could go higher
> from here after such an enormous run up, which is almost always the
> point where I need to go the other way. Every one says they are selling
> into the market (except for Joe Public, which is too small vol to
> matter, imho).

Market Rally: Secular Bull or Cyclical?

I'd be careful with investing on "secular" trends. We only have meaningful market data going back a few decades and since then maybe observed 4 or 5 of such secular trends. Do you want to invest on theories based on such a small sample which isn't even adjusted for regime shifts?

Are You Buying This Rally?

If you've missed the rally so far, I'd also not be going all in right now. Either you could sell some puts with strikes of your desired entry level (for example the Augis 09 at SPY 90) and make some cash that way in case they expire worthless or you just slowly ease back into the market by investing 10 % of your total allocation every month on dips.

The Swine Flu Swoon: What the Markets Didn't Need

David, can we count on you giving us a heads up when markets are going to go up again?

Sucker's Rally Approaching an End

I sometimes wonder, are people trading the markets or the economy of the last quarter? Every new bull market will start out as a bear market rally. Only after a long time you can acurately distinguish between a sucker's rally and a new bull market.

I'm astonished that by now there are still so many people that think a rally can't sustain itself just because current economic data is weak.