ari5000

Overbought Stocks

It's a very helpful list. Bunch of failed traders in the comment section.

If the data isn't helpful to you, then don't use it. He's presenting data, not making some lame prediction like 'this is the top'.

All stocks tend to undergo reversion of the mean -- even if they do continue to go up for years, there are always short term corrections where a stock will drop to its 50 or 20 day MA -- where most traders are comfortable rebuying and creating true support.

A lot of financials on this list. The squeeze will remain in effect until the $USD rallies. Today the $USD looked like it might revert but finished down once again... so no dice.

Keep this list next to you when the $USD finally makes a swing higher. I bet this whole list gets slammed, far outpacing the drop in the rest of the SPY. But follow your plan. Saying the market will correct "with a vengeance by mid October" is just plain stupid.

And not surprisingly, that kind of opinion probably means the writer hasn't made much money on the best rally in years.

Speculative Trading Indicates Rally Losing Steam

And that's the other thing bears don't get.

A sudden surge of inflation may cause stock markets to blast off -- a la Zimbabwe.

There's a lot of things bears need to fear... even after the recent rally off multi-year lows. It's very clear that government intervention is at unprecedented levels -- so expect the impossible.

I was just looking at my Motley Caps portfolio. I shorted AIG on Aug. 14 -- I'm down 102% on that pick. I can only imagine what it's like to be real-money short on AIG or C... And I know people who went long AIG/C -- let me tell you, everyone who has the (no) sense to be long those names is high as kite from the money they are raking in. They approach every selloff now as an opportunity to buy the dip and make another fast 10 grand. It's infectious as all bubble markets are. But this is one of the first bubble markets to get a stamp of approval from the Fed -- they created it!

Being in cash is understandable... but being short can be catastrophic when there's no limits to Wall Street's power over the Fed.

Speculative Trading Indicates Rally Losing Steam

Everyone's been calling the top for the last 3 months.

Instead of wondering -- why is the market still going up?

There's something new taking place. The Government has essentially made an ALL IN bet by stimulating. The govt. has now replaced all spending by the private sector and consumers in an attempt to keep the economy alive. The financial sector only thrives if the economy outside Wall Street thrives. By backstopping the banks, the Fed is trying to have the tail wag the dog -- stimulate the banks and hopefully, somehow, the financial dealings will stimulate the greater economy.

I believe this is why the zombie banks are now leading the pack -- it's an attempt by the Fed to up-end the nature of the business cycle. It makes perfect sense as a government drowning in debt and creating more each day -- absolutely NEEDS a growing economy... even if that growth comes by simply through inflation.

Predictions of a 1000 point drop are almost ridiculous at this point. It shows a total lack of understanding of how a bankrupt entity like AIG could rise 100% in the first place. The Fed cannot stop what it has started. If the stimulus package fails, they will start a new one... TARP, TALF, cash for clunkers, housing credits... I've left out a dozen more. A crash? How? The Fed can spend more money than the entire world. What could possibly cause a crash when the Fed can spend infinite $$ ?? The Fed has supreme power now. Nobody can stop them. The taxpayers have no voice. Congress work for the corporations that benefit from Ponzi spending.

The Fed has spent an is backstopping bets that probably equal a few hundred grand per citizen. All traders need to maximize their share of the takings. 90% of the trillions spent will go to a small percentage of insiders. We are living in a country that no longer has a rational government. The stock market, with zombie banks leading, clearly reflects the new mentality.

I feel sorry for those who 'cashed out' or are sitting in gold (which the FCBs control an will never let rise) -- they are missing the greatest giveaway this generation will ever see. And I really doubt this is going to end any time soon.

I can only dream of the next round of programs to come. But I will stay fully invested to capture as much upside as I can.