Time to short Stocks!

[william the wie]

Didn't you say that when gold was at $1000?

Not quite -but I was bearish at around $1150 and I am still bearish. Bubble anyone?

That's coming.

But why do you think we're topping? I've been looking at my Bloomberg all afternoon, watching. I even put on a euro short, which would pay off if stocks did top. But it doesn't appear to be topping at all, at least not to me.

The insider sell/buy ratio does indicate a major correction ahead but as to when my crystal ball is rather cloudy. I will stick with leap straddles. There is a major correction about once every 16 quarters so I put in about a 1/8th bet per year on the assumption that I can add to my bet if the market moves my way and can stand the loss if it doesn't.

 

[Zander]

Not quite -but I was bearish at around $1150 and I am still bearish. Bubble anyone?

That's coming.

But why do you think we're topping? I've been looking at my Bloomberg all afternoon, watching. I even put on a euro short, which would pay off if stocks did top. But it doesn't appear to be topping at all, at least not to me.

The insider sell/buy ratio does indicate a major correction ahead but as to when my crystal ball is rather cloudy. I will stick with leap straddles. There is a major correction about once every 16 quarters so I put in about a 1/8th bet per year on the assumption that I can add to my bet if the market moves my way and can stand the loss if it doesn't.

Personally, I like straight 'put' options on the SP500 or OEX better than a leap straddle right now. I'd buy deep out of the money with a June Expiration. More upside, less downside, lower premium. How far out do you buy the LEAPS?

 

[topspin]

LOL market up 125 today

 

[william the wie]

That's coming.

But why do you think we're topping? I've been looking at my Bloomberg all afternoon, watching. I even put on a euro short, which would pay off if stocks did top. But it doesn't appear to be topping at all, at least not to me.

The insider sell/buy ratio does indicate a major correction ahead but as to when my crystal ball is rather cloudy. I will stick with leap straddles. There is a major correction about once every 16 quarters so I put in about a 1/8th bet per year on the assumption that I can add to my bet if the market moves my way and can stand the loss if it doesn't.

Personally, I like straight 'put' options on the SP500 or OEX better than a leap straddle right now. I'd buy deep out of the money with a June Expiration. More upside, less downside, lower premium. How far out do you buy the LEAPS?

one year minimum currently and I am considering two years. With all of the Fed intervention going on I can be certain that something bad will happen in the not too distant future but I am unable to determine what. The DJIA is 64% overvalued in terms of dividend yield, insiders are dumping and the Dow is going up on ever decreasing volume. Deflation could hit hard and eventually it will due to collapsing asset prices. Inflation could also hit hard and eventually it will too due to quantitative easing. But as to what will hit first I am clueless.

 

[Zander]

The insider sell/buy ratio does indicate a major correction ahead but as to when my crystal ball is rather cloudy. I will stick with leap straddles. There is a major correction about once every 16 quarters so I put in about a 1/8th bet per year on the assumption that I can add to my bet if the market moves my way and can stand the loss if it doesn't.

Personally, I like straight 'put' options on the SP500 or OEX better than a leap straddle right now. I'd buy deep out of the money with a June Expiration. More upside, less downside, lower premium. How far out do you buy the LEAPS?

one year minimum currently and I am considering two years. With all of the Fed intervention going on I can be certain that something bad will happen in the not too distant future but I am unable to determine what. The DJIA is 64% overvalued in terms of dividend yield, insiders are dumping and the Dow is going up on ever decreasing volume. Deflation could hit hard and eventually it will due to collapsing asset prices. Inflation could also hit hard and eventually it will too due to quantitative easing. But as to what will hit first I am clueless.

That 'uncertainty' is why I went with the inverse fund as opposed to options - no time risk. I do not see a lot of upside potential for stock prices especially in the short term (3-6 months) . Today was a great example - The SP 500 started with a 16 point rise - then ended the day only 8 points higher on low volume. The bear market rally is running on fumes......

 

[Toro]

Volume has been lousy but was big today. NYSE Composite volume was the largest in three months. As Japan opens up, the euro and gold are spiking hard and I'm going to get stopped out of my euro short.

This is a frenzied melt-up. I agree that there are several indicators suggesting at least a near-term peak, but in a melt-up (or a melt-down) indicators get thrown out the window, and you can get your head cut off pretty quickly if you are on the opposite side.

I'm out of my gold long but am thinking of putting it back on. I believe that gold will one day enter bubble territory, and enormous gains will be made. I would kick myself if that bubble move were to happen now.

Since Sept 1, every piece of news has been good news. Better than expected news causes the market to go up because it shows that the economy is not falling apart. Worse than expected news causes the market to go up because it increases the chances of QE.

This is so fucked up. It will end badly, but my job is to make money, not political pronouncements.

 

[Toro]

[
That 'uncertainty' is why I went with the inverse fund as opposed to options - no time risk. I do not see a lot of upside potential for stock prices especially in the short term (3-6 months) . Today was a great example - The SP 500 started with a 16 point rise - then ended the day only 8 points higher on low volume. The bear market rally is running on fumes......

Zander

Be very careful with those leveraged inverse funds. The decay from the optionality and volatility can be devastating. There were several of these things which actually declined when the market collapsed, even though one would have expected them to rise substantially. I use them, but I dump them and quickly cut my losses if I think I'm wrong.

 

[Paulie]

One word.....DEFLATION.

Didn't you say that when gold was at $1000?

Not quite -but I was bearish at around $1150 and I am still bearish. Bubble anyone?

Bubbles are typically based on irrational speculative actions.

Gold has every fundamental reason to continue higher right now. There's nothing irrational about it.

 

[Toro]

Maybe I won't get stopped out.

I own Nov EUO 19 calls, which normally trade a few hundred a day. Someone came in and bought 30,715 calls today. Someone, probably much smarter than I am, is taking a very big bet that the euro is going to fall soon.

 

[Zander]

Didn't you say that when gold was at $1000?

Not quite -but I was bearish at around $1150 and I am still bearish. Bubble anyone?

Bubbles are typically based on irrational speculative actions.

Gold has every fundamental reason to continue higher right now. There's nothing irrational about it.

Then buy it or hold it.

I am still bearish on gold. It is a fear based, irrational bubble that, like all bubbles, will end badly. Time will tell......

 

[Zander]

Maybe I won't get stopped out.

I own Nov EUO 19 calls, which normally trade a few hundred a day. Someone came in and bought 30,715 calls today. Someone, probably much smarter than I am, is taking a very big bet that the euro is going to fall soon.

The daily sentiment on the US Dollar is 97% bearish.........

 

[Paulie]

Not quite -but I was bearish at around $1150 and I am still bearish. Bubble anyone?

Bubbles are typically based on irrational speculative actions.

Gold has every fundamental reason to continue higher right now. There's nothing irrational about it.

Then buy it or hold it.

I am still bearish on gold. It is a fear based, irrational bubble that, like all bubbles, will end badly. Time will tell......

What's irrational about it?

 

[Toro]

Maybe I won't get stopped out.

I own Nov EUO 19 calls, which normally trade a few hundred a day. Someone came in and bought 30,715 calls today. Someone, probably much smarter than I am, is taking a very big bet that the euro is going to fall soon.

The daily sentiment on the US Dollar is 97% bearish.........

Yeah, I know. And since I posted that, the euro is up 87 pips in 2 hours.

PRAGMATIC CAPITALISM IS THE DOLLAR RALLY ABOUT TO KILL RISK ASSETS?

 

[Zander]

Bubbles are typically based on irrational speculative actions.

Gold has every fundamental reason to continue higher right now. There's nothing irrational about it.

Then buy it or hold it.

I am still bearish on gold. It is a fear based, irrational bubble that, like all bubbles, will end badly. Time will tell......

What's irrational about it?

What isn't?

EDIT: just because it is a bubble doesn't mean you can't make a profit from it. It might go to $3000 an ounce.... Too much risk for me...maybe not for you.

 

[william the wie]

I think the market is illustrating one of the few Keynesianisms not invalidated by advances in behavioral, evolutionary and neuro-economics:

"The market can stay irrational longer than you can stay solvent."

 

[KissMy]

Don't try to short this market even though all signs point to correction. Toro tried to short it & I shorted the biggest swinging dick in the DOW, Caterpillar CAT last week at $80. It dropped to $77 & then QE2 euphoria hit & it gapped up. I sold out at $78. So I made a paltry $2 but the stock is back above $80 so it is not worth the risk.

Lighten up on Cash & Go Heavy & Stay Long Gold. The Fed is going to knock Gold & Silver out of the park. Precious metals are & will continue to far outpace all but a few stocks until the Fed lets interest rates climb above 10%.

This scenario happened in the 1904, 1932, 1941, 1974 & 1980 when about 2 troy ounces of Gold equaled the DOW. If current trend-lines hold 5ozt Gold will equal the DOW shortly. At current DOW price Gold will climb to a minimum of $2,222+ per ozt. We are experiencing a cascading dollar crash.

 

[topspin]

you can get burned in gold as well, obviously it's had several periods when it tanked.
there is still tons of fear of equities which means there are plenty of people left to get back in stocks.

 

[editec]

I have been in cash for the last year with no regrets. Now I think the topping process is done and we are set for a major decline in stock prices.

Today I bought shares of ProShares UltraShort S&P 500 ETF at $28.08.

Best of luck!

So did you get a margin call yesterday?

 

[Douger]

One word.....DEFLATION.

Didn't you say that when gold was at $1000?

Gold is rising, yes. That price is running on the fear (of future inflation)factor more than because of inflation.

But things of real value (like real estate) are continuing to price down.

The perceived losses in RE values far exceed the aggregate value of the rising prices of gold.

Yes, we are still in a period of deflation.

People still aren't spending. Sales are still down. They are attempting to jettison excessive debt.

Deflation is still the problem.

I don't know what it will take for this trend to reverse itself.

Some economics think another massive stimulus (hopefully one that is corrected targeted this time) might stem that tide.

I think the problems are more fundamental than that, alhtough I don't doubt it might help somewhat.

Gold is rising because the Empires dollar is monopoly money.
Copper, nickel, cadmium,crystalline silicon, zinc and aluminio are necessary for progress.
Gold and silver are for it's proponents. Goldberg and Silverstein.

 

[uscitizen]

I do not think there is enough gold in existence to equal all the gold "bought".