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OtherGround Forums >> It's time to short the stock markets!!!


1/23/11 9:57 AM
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EVILYOSHIDA
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Edited: 08/18/12 6:57 AM
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NOTE: Nothing in this thread should be taken as investment advice and everything is for informational/discussion purposes only.

the dow jones keeps going up on lower volume, while the russell 2000 is going down on higher volume.

dow jones keeps going higher, while the nasdaq is starting to fade.

QE2 is drying up and the market is headed for a big correction, on the order of 5-10%.

What are people's opinions?
1/23/11 10:00 AM
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Fathead D
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 Not likely but if it does I will load up on stocks since they will be on sale.
1/23/11 10:01 AM
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Coffee Guy
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a major correction has to be looming. I thought it was going to be last quarter but QE2 bulldozed that chance. I am going into cash this week. I may miss a little more upside, but I think I will be happy in the end.

I also think your 5-10 guess is too modest. I am thinking 10-20%.
1/23/11 10:04 AM
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EVILYOSHIDA
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Fathead D -  Not likely but if it does I will load up on stocks since they will be on sale.


the market is out of juice. it is topping out. the market is making new highs, but there is a total lack of new 52 week highs for individual stocks.

the question is when. I think it is coming starting tommorrow.

1/23/11 10:06 AM
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EVILYOSHIDA
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Coffee Guy - a major correction has to be looming. I thought it was going to be last quarter but QE2 bulldozed that chance. I am going into cash this week. I may miss a little more upside, but I think I will be happy in the end.

I also think your 5-10 guess is too modest. I am thinking 10-20%.


everybody has been expecting the markets to correct since around the last week of december. there was no customary end of the year selloff in stocks. the selloff didn't come in early january.

with china raising interest rates, QE2 drying up and banks reporting lower earnings. It is goin to come soon.

i'm nearly all cash but have a 10,000 usd position in TWM, the russell 2000 short.

the small caps go down A LOT more during corrections than the large caps.

guys who are more adventurous can buy the BGZ, the large cap 3x short.


1/23/11 10:09 AM
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EVILYOSHIDA
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also fathead, loading up when stocks go down is like catching a falling knife.

wait for a bottom and true reversal then start buying.

do not buy waiting to catch a bottom.

esp. with the markets being traded by computers, it creates feedback effects that can exaggerate investor sentiment.

1/23/11 10:11 AM
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Coffee Guy
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I am in agreement EY. I also think sentiment is just too high. When everyone is saying buy, it's probably time to step over to the other side and sell.

I also have no faith in the American economy with gas creeping up to 3.50- 4.00. It crushed us last time it happened.
1/23/11 10:30 AM
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EVILYOSHIDA
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even if you are bullish for 2011, THERE STILL NEEDS TO BE A CORRECTION for this secular bull rally to be healthy.

the market has been going up for 2 months straight! straight line.

a correction HAS TO BECOMING whether or not you are bullish or bearish long term.

1/23/11 10:32 AM
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EVILYOSHIDA
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bawls, what kind of options plays are you in?

also, i believe the market has stayed irrational for long enough. most technicians were calling for a selloff in early january. it didn't happen, but i will believe it will be happening soon.

1/23/11 10:49 AM
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EVILYOSHIDA
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WOW.

i don't watch cnbc.

S & P is dirt cheap compared to HISTORICAL LEVELS, we are in a different environment and now with different growth prospects.

i base my analysis on technical analysis.

when the small caps and large caps start to DIVERGE, this signals a correction.

the last time the russel diverged from the dow, it triggered the april 2009 selloff. check it yourself.

1/23/11 10:50 AM
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HardyJenns
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suckers' run, I pulled everthing out last month as well

We only have about a dozen reasons for a double dip recession this year, let alone a correction in the market:

-- looming muni bond crisis this summer all over the country
-- a big state going into financial insolvency (CA, IL, NY, etc) and the feds refusing to bail out
-- further drop in residential RE prices (glut of foreclosures that are still waiting to hit the market to correct housing prices)
-- potential inflation
-- surge in oil prices
-- another European debt crisis that ripples worldwide

etc, etc

This economy is going nowhere, take your gains now IMO and be ready to buy with the next drop
1/23/11 10:53 AM
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Coffee Guy
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There is nothing wrong with taking a profit. And yes, I do watch CNBC, and everyone is BULLISH. That's why I want to sell.
1/23/11 11:00 AM
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EVILYOSHIDA
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coffee guy is correct. the cnbc pundits are some of the best contrarian indicators you can get. the more bullish they are, the more likely the opposite is going to happen.

cramer said bear stearns was a buy right before it went bankrupt.

they are clowns in cnbc.
1/23/11 11:06 AM
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Ocean6
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Edited: 01/23/11 11:06 AM
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How will this coming revaluation affect the dollar, and hence the gold price?


edited for spelling
1/23/11 11:09 AM
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Lurken
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More than a correction is coming. Quantative easing ( money printing) will move into the trillions before its done. We are in the eye of the storm. Inflation will hit hard.Money is to be made in shorts.

be carefule, this shit is not for amateurs. A cautious man will get into commodities and foreign money to weather the storm. Im keeping half in cash for buy oppurtunities after the shit hits the fan.
1/23/11 11:11 AM
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Brock75thRanger
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Edited: 01/23/11 11:16 AM
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swing buyers on the dow have been buying every time price has touched the 5 period moving average on a daily chart and if theyve had a stop under the 20 moving average they havnt been stopped out in weeks.Once i see the 20 period moving average broken i am shorting the hell out of it,but until then my bias will be long

IBM has been keeping the dow strong,i think once the next strong break of ibm support happens the dow will follow so im watching that every cpl hours as well
1/23/11 11:14 AM
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Fugazi
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 Where was the DOW at just before it started tanking in September '08? IOW, is it approaching a double top?


1/23/11 11:15 AM
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EVILYOSHIDA
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brock. the nasdaq already broke through the 20 day.

the russel is down about 7% in the last 3 trading sessions.

dip buyers are going to get fleece johnsoned this time.

it's going up on lower and lower conviction. macd histograms are shallower and shallower with each move up.

the RSI is at 75.. it's really time to short.

1/23/11 11:17 AM
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EVILYOSHIDA
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fugazi. we are exactly AT the point where the market tanked in sep. of 08. EXACTLy to the tee.

1/23/11 11:19 AM
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Brock75thRanger
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EVILYOSHIDA - brock. the nasdaq already broke through the 20 day.

the russel is down about 7% in the last 3 trading sessions.

dip buyers are going to get fleece johnsoned this time.

it's going up on lower and lower conviction. macd histograms are shallower and shallower with each move up.

the RSI is at 75.. it's really time to short.



you could be right but to get in now what would your stop be?
1/23/11 11:20 AM
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MoreThanUFC
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 So, how will all this affect the price of metals?
1/23/11 11:20 AM
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Fugazi
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EVILYOSHIDA - fugazi. we are exactly AT the point where the market tanked in sep. of 08. EXACTLy to the tee.


 Interesting....
1/23/11 11:24 AM
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EVILYOSHIDA
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MoreThanUFC -  So, how will all this affect the price of metals?


metals are already tanking.

they will tank more, a lot more when the market corrects. if the correction turns into a panic, then metals may be a safe haven, and will start to reverse and rally again.

1/23/11 11:24 AM
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Coffee Guy
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well EY, what if we break through these levels then? Are you going change your thesis?

I am going into cash because I want my profits. If we break through the 08 levels the market is most likely going another 15% higher.
1/23/11 11:27 AM
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EVILYOSHIDA
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Brock75thRanger - 
EVILYOSHIDA - brock. the nasdaq already broke through the 20 day.

the russel is down about 7% in the last 3 trading sessions.

dip buyers are going to get fleece johnsoned this time.

it's going up on lower and lower conviction. macd histograms are shallower and shallower with each move up.

the RSI is at 75.. it's really time to short.



you could be right but to get in now what would your stop be?


my stop loss is 2% of my capital. always.



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