J3apoe asks: Where do you think we go from here, with all the news flying around? 1. banning shorts 2. RTC rumor. I think they are significant events and would have huge effect on the market.
hi japoe… if i were to take a few steps back, i would call this nothing but a bearish rally… these HUGE rallies occur in every severe bear market. So, actually, today was a “good day” for bears. You want the spikes so you can short more. however, you’re right, the short term shows we could rally for a few more days. There’s not much resistance for a while. I think its best to keep your trades tight, not keeping most of them overnight.
… banning shorts, and the RTC plan does not fix anything overnight, and the stock market is forward thinking, so you will need more signs of broad economic recovery before signalling a good reason for a reversal. Any new policy as drastic as the RTC must first past Congress (expect delays), and will be followed by intense speculation as to whether it will work. So yes, expect a lot of volatility on that speculation.
Remember, EVERY new bull market has leadership. Ask yourself, what will our new leaders be? Forget all those leaders you’ve been trading since 2003, like AAPL, GOOG, TASR, BIDU, GRMN, HANS… they’re all done. Those leaders are what CSCO, QCOM, AOL, NSCP (netscape) where from 1998 – 2000.
Get down, and look for the NEXT BULL! Its out there… I’ve been telling my readers to search in alternative energy sectors as well as health-care sectors since these are at the early stages of a powerful trend… also, technology is a good spot to dig, but be more focused, don’t just look for computers, phones, and chips… find innovation like companies like GEOY that put stuff in the air, or even VMW which owns the best internet content software (VMW is near its ipo!).
In no way am I telling you to buy now… but always keep an eye for the next bull market. Always remember the trend is still down. That trend will turn when leadership rises from the tape.
Notes: Dow +400 (nearly +600 range in the day)
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Gio, all these changes will discourage people to buy stocks, especially the short sellers. The new leadership will be in real estate, there is a lot of it out there right now at fire sale prices. The gov. made the new stock rules so you invest in homes, 2nd homes, etc, esp. in Hawaii.
buylo–
real estate? I don’t see that happening right now. We’ve been witnessing a credit contraction and the US real estate bubble pop. Where is the liquidity and appetite for risk on the part of investors, for asset prices to increase again? When any asset bubble pops, it takes some time before investors comeback for more. Bad memories die hard.
Global real estate is worse. The UK, Australia, Asia, Spain and other countries are seeing their housing markets collapsing. That, and all the stupendous construction projects we’ve been hearing about in Dubai tell me the Middle East is now approaching the top of their cycle.
You’re fired!
GIO
$NAUD, is off the chart–
If the market starts out pre-market gapped up, go to short sell immediately–
I think China comes roaring back in 2010. My first pick is LDK. They get a major development next week with their main plant getting closer to coming on-line and fully operational. All things considered the stock has held up this month with a very quick re-test of that earnings gap from $35.50. The projected poly supply for 2010 is extremely aggressive making them the largest supplier in the world. They will be 100% self sufficient in their ability to produce product in house through the entire process.
Donald Trumpe, mostly i was just kiddin – eg short sellers don’t ‘buy’ stocks, but you can ask Gio about Hawaii Real Estate – Gio, am I right?
Gio,
Thanks for the commentary on my question. I like how you look at this event as a bear market vicious rally as well as a potential bottom. Market will tell us which it is, but one thing is certain. It will sure move back and forth. I missed most of the big move yesterday ’cause I was out. I was able to buy some (a small portion) after hours last night. What can I say? I will wait for the next move:)
no prob. yup, this is a vicious bear market rally, and I will be shorting again when the Vix gets another spike down. i just made a little shout out on how to spot a real bull market, which comes from real leadership… companies with real earnings, an economy with real growth. play today’s tape as it is, but dont convince yourself the next bull market is here just yet.