Higgenbotham wrote:What you are seeing could very well be the next stage of Maximum Ruin. It's more about what the bulls are thinking in my estimation and gives them a reason to lighten up and wait for a pullback or wait to get in instead of buying now. I've seen this type of thing before that you're talking about with the pundits. Generally, when a "bull market gets confirmed" in the eyes of the pundits they then begin to hope for a buying opportunity and prep themselves up for that. The idea there is for everyone to get ready to buy the dip. Then when they do the floor falls out from under them. 10% is quite a setup because that's a long way down and will suck a lot of people in.
Just my idea, but my attempt to add to my shorts failed and I will remain with my original position for now. I'm positioned to absorb more new highs but don't believe it will happen at this point. The fundamentals are just too darned heavy.
JonLaw wrote:The entire stock market since 2000 has been one giant exercise in Maximum Ruin.
Inflation is destryoing the value of all long portfolios at a rate equivalent to that of the Great Depression. It's just happening more slowly than 1929-1932. Take a look at Doug Short's charts at Doug Short's Website where he compares some severe secular bear markets.
This secular bear looks like a range bound market, nominally, with severe losses being taken if you look at it from an inflation-adjusted standpoint.
Now that financial collaspe has been at least momentarily prevented, we are probably looking at a greater amount of financial pain, but spread out over a longer period of time.
Higgenbotham wrote:The following is a summary of what I see now that today is over and everything I've discussed in the past month...
Good Luck to everyone in surviving this Depression.
wvbill wrote:Just wanted to say I have been reading all your posts with interest. Please continue to post. And, thank you very much for sharing your information and insights.
Like most here, I feel the next leg down is near and it will be brutal. Timing is always the problem. I continue to hold inverse index funds. A move somewhat higher (DOW 10,000 ish) would not suprise me, but neither would a collapse at any time.
Thanks for your posts.
John wrote:Dear Higgie,
One thing that's definitely going on is that it almost seems as if
nothing has been going on.
That's just how things are in August. Everyone is on vacation or
taking the day off. Everyone is on auto-pilot, and even terrorists
can't break through the calm.
So it's quite possible that the current situation will continue at
least until Labor Day. After that, things should start moving along.
Higgenbotham wrote:wvbill wrote:I agree with what you're saying about timing. It's a big risk. Everything I know about history and fundamentals says this market is going lower. On the other hand, everything I know about chart reading and technicals says the market is going higher (like tomorrow). Obviously others can see that too. I've said about all I can think of to say about history. The rest is seat of the pants (trading in and out if necessary) and I have a feeling it is going to be very difficult.
I will continue to post here and there. Thanks for your comments.
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