Registered User
Joined: 10/7/2004
Posts: 2,126
|
As they say buy low and sell high. I know it sounds easier said than done.
Anyways, we all agree that the market is at a truly all time high. No matter which frame - minute, hourly, daily, weekly, ..... etc - it is at a new high CENTURY HIGH. Now the reason for me to bring this to your attention is because - think about it; who would want to be long at this point, I know I rather be selling. Certainly the risk/reward ratios are not going for you in any long position. I personally think the market is more vulnarable at this point that it was a few weeks back when it took a dive for a couple of days.
Short covering has help to reach this position, but those bears are not done just yet. I would be cautious this coming week, and would keep a close eye on the candle. There is no real reason for the market be where it is at, since economy fundamentals have not improved, and certainly the market needs a real correction. I am sure the cheerleaders, and pushers, and hasslers are out on CNBC along with Cramer telling you it is time to buy. I would be cautious, very cautious for those of you looking at longer time frames.
good luck.
|
|
Registered User
Joined: 2/8/2006
Posts: 73
|
good point, I will be more careful this week. 
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
QUOTE (BigBlock) Anyways, we all agree that the market is at a truly all time high. No matter which frame - minute, hourly, daily, weekly, ..... etc - it is at a new high CENTURY HIGH.
Huh? The more pertinent indices Naz and SP00 are not at all time highs; the Naz is a huge distance away from an all time high and would need to double to get back to old all time highs. SP within striking distance. Is the Dow and its 30 stocks THE market?
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
fpetry
that is what I was thinking. I see way to many nice looking charts to think about shorting. PLUS i got hammered on my last round of shorts. This was IMO just a steep correction that has concuded. I think we are in the earlier stages of a Bull that will last us for some time. There may be more corrections.. and I hope there are. But I think it will be a while before we see something in the magnitude of last May. After Fridays gain i'd hesitate to instigate new long orders now unless it was soemthing that I was watching closely for some time and for what ever reason it was laging behind. A little consolidation here and I think we'll be good for another leg up.
Buying low and selling high is definately harter said than done... becasue it is all so subjective... what is low and high today may turn out to be high and higher next month.
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
Well said Scott. My favorite old saying that I often repeat like a broken record is "trade what you see not what you think:)" Of course that doesn't mean to not be extra cautious when market has had a good run. I dabbled for first time in a long time this morning in Six Flags, SIX, simply because my eyes saw the indicators I like give a signal, so I entered a small starter position. But I've got a small position in QID as a hedge if market turns south and would add to it in that case.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (fpetry) QUOTE (BigBlock) Anyways, we all agree that the market is at a truly all time high. No matter which frame - minute, hourly, daily, weekly, ..... etc - it is at a new high CENTURY HIGH. Huh? The more pertinent indices Naz and SP00 are not at all time highs; the Naz is a huge distance away from an all time high and would need to double to get back to old all time highs. SP within striking distance. Is the Dow and its 30 stocks THE market?
Indeed as the media puts it out to the poor souls that feed the market. The media doesn't differentiate because their only focus is what makes them money by collecting the revenue from advertisers with the promise of high traffic exposure. As when I spoke I referred to the "market" that the media is cheerleeding - the Dow. The one that allows them to make noise.
Technically we should be speaking of indexes, and exchanges a difference many still can't grasp. But the idea here was simply to make those cautious of media hype. The Dow 30 stocks is not indeed an index representative of the "markets" or "market", but it is certainly the index or "Market" on the spot light as by Media exposure.
good luck
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (scottnlena) fpetry
that is what I was thinking. I see way to many nice looking charts to think about shorting. PLUS i got hammered on my last round of shorts. This was IMO just a steep correction that has concuded. I think we are in the earlier stages of a Bull that will last us for some time. There may be more corrections.. and I hope there are. But I think it will be a while before we see something in the magnitude of last May. After Fridays gain i'd hesitate to instigate new long orders now unless it was soemthing that I was watching closely for some time and for what ever reason it was laging behind. A little consolidation here and I think we'll be good for another leg up.
Buying low and selling high is definately harter said than done... becasue it is all so subjective... what is low and high today may turn out to be high and higher next month.
Dear Scottnlena, I can't predict what any stock or market will do at any given time. My comments only aluded to the point that as the media advertise the "all time highs" as a great news I suppose to attract buyers, and the fact is clear that this position would not give you the best risk/reward entry. Just simply that. In any given time there is a 1 to 3 ratio of stocks going opposite to the direction of the market. Meaning that for a day trader or short time trader the direction of the market is meaning less. You can make money short in a day when the dow is rocketing 200 points or long when the dow is dropping 200 points. I am not telling you to go against the market, but you could very well do with no problem. You just need to know where you are and why you are there.
In regards to the correction I have to say what I said before. The 4 yr bull cycle hasn't corrected yet, and it needs to correct. There is no fundamental changes in the economy to justify. I am not sure when it will happen or how it will happen, I just know it will. Considering that and the fact that this "markets" are way above their heads - highs or no highs, I sure wouldn't initiate any long (long term commitment) to any position now. I never said in my initial commentary to go short. But I would prepare better to go short, than long. The "markets" will tell you what to do soon.
good luck
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
this is true .. I'm cautious of instigating new long orders now.... however a few of my Good Till Canceled orders triggered the other day and it looks like i'm gonna have to hold them through a minor retracement...  but I certainly didn't find many good looking short orders yesterday.. Though today may be a day that gives some signals... so we'll see. I may open a few shorts to hedge agains the comming step back.
however have you noticed that often at tops.. sometimes at bottoms there is an increase in volitility, you start getting more frequent little gaps and wild price swings?
It seems like my institutional scan numbers have been surging lately so I think there are some considerable institutional activity going on ... Possibly some late money coming into pension funds.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
this is true .. I'm cautious of instigating new long orders now.... however a few of my Good Till Canceled orders triggered the other day and it looks like i'm gonna have to hold them through a minor retracement... but I certainly didn't find many good looking short orders yesterday.. Though today may be a day that gives some signals... so we'll see. I may open a few shorts to hedge agains the comming step back.
however have you noticed that often at tops.. sometimes at bottoms there is an increase in volitility, you start getting more frequent little gaps and wild price swings?
It seems like my institutional scan numbers have been surging lately so I think there are some considerable institutional activity going on ... Possibly some late money coming into pension funds.
|
|
Registered User
Joined: 4/8/2006
Posts: 5
|
scott..how did get stuck? Got to stick to what is working. This is a narrow market...but you know what? THAT IS ALL I HEAR during each rally in the last 4 years..the rally is narrow, so it will not last.... it has not been true!
..and should not be this time. Select regional banks are doing great, brokers, big industrials, foreign levered companies and a few tech and retail. No need to buy anywhere else.
Someone once asked Warren Buffett is it dumb for investors to target their buys and resist too much diversification...he said only if they do not know what they are doing, otherwise, you must concentrate your sector and stock selections.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
There is a quote attributed to George Soros:
"The way to make money in the market is to find a trend
that is based on a false premise and to ride that trend
until just before it is disproven"
We can look in the rearview mirror and say the "tech bubble" was
irrational. There was still plenty of money to be made.
Thanks
diceman
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Sure Diceman look at the rear view mirror and see what happened to those who got in late,and those who didn't jump of the boat on time - if you got in at the very top (begining of 2000 - say Feb of 2000), then your prospects would have been substantial losses - indeed some folks lost a life time savings. I still remember some elderlies in tears at their brokerages when they realize they had nothing left, and no prospects of rebuilding any of their wealth (they tell you to hold long, dont they).
With that said, and going back to the DOW which is the Cheerleaders focus here. You know the wallstreet chearleaders, pushers, and hasslers who play their show each and everyday iat CNBC, and related sources as well as other publications with only one goal, and believe me that goal IS NOT for you to make money, but for you to contribute to the system in effect.
Going back to the Dow - If you hold any position in the DOW from the beginning of 2000 to today (17 stocks still have not recovered, plus four more if you count inflation are still under heat)that is 21 out of 30 still under heat. And if you look at technology stocks from back them - well the rear view mirror is going to get a little dark from any time after 2000 - SUNW, CSCO, MSFT, CIEN .....etc, etc are still in the mud and will not recover in your life time.
Someone use to say this is a market of stocks - it sure is. Because if you are not in the right place at the right time all you are going to count is your pennies regardless of market direction.
With that said, and if perhaps the market continues up as it may well do. Still the risk/reward entry point wasn't effective at the highest highs - more odds and less risk exist down at the trend line to go long. That was my only point in the original comment. Don't jump in the boat blindly, because it is not what it seems.
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
Diceman does have a good point though, in that if you failed to take part in the irrational tech craze you would have missed one of the most potentially profitable trading environments in at least 10 years and maybe 20. If you had stopped trading the stocks though and just switched to a one decision stock mentaility, it clearly would have ended badly. It would be interesting to hear from anyone who traded actively in that environment how things turned out for them and how they managed the bear market.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Exactly jcfla7.
Fear and greed are the primary market emotions.
Those who thought they could get in at the top for
"easy money" with no knowledge. Should be blaming
the latter instead of CNBC.
Thanks
diceman
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Dear Fellows, you can never go wrong by not losing money in the market. Indeed those burned out from losing, will tell you that you are making money by not losing (some kind of mentality ah!). I have been trading the markets since 1992, as an active day trader since 1998 and yes I rode the bull and the bear or the 90's and 2000. In fact, I made more money during the bear market that at any other time in my trading life.
My original comment was not to advice anyone to do anything, but it was just meant as a cautious comment to those with longer time frames. I careless what the market is about to do or have done. I get up every morning (or afternoon), and I reevaluate the situation as it is happening. My time frame is a 20 min window - that is my world either swing intraday or scalp big blocks hence my user name. I careless about the noise, CNBC, or the whole darn circus. My truth is in the candles, and in myself. As all of you not new here know me well by my statement "You are the market". I am not new by any means to this board or to the markets for that matter (for all of you who wonder).
So with that aside, you will need to decide what you need to do by yourself. My comments weren't intructing anyone to do anything, or targeting anyone in specifid. I was trying to bring caution, and a new perspective to the current position.
It is up to you to make your own conclusions, to reaset the situation, and to pick your own stock. You can made money in any eviroment, as well as lose it too. It is you, and only you who dictates your own outcome for any trade.
good luck
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
BigBlock, thanks for clarifying your original comment about markets at all time highs....I now see the point you were making at expense of CNBC's hyping the Dow's highs as the greatest thing since the wheel. Well said.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Thanks fpetry. I am glad someone is grasping the point.
good luck.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
What I was doing seems not to be working.. or I subtly changed what I was doing.
|
|
|
Guest-1 |