I just put in a short S&P this afternoon for my personal portfolio along with a short Real Estate. Just wanted to see what other people over hear think in terms of where they think the markets are headed and the reasons for their convictions.
Short SPX might be a good short term play, since lots of people (like you) are probably going to sell as it approaches 1100. I’m not sure that I would bet on ending 2009 below the current level, though. Too much good news.
Great day to go short, went short a week ago. You will be happy in three months
Good news? Rents along with housing prices and cash flows are still falling. At a slower rate I admit but foreclosures are still a concern. People are still hurting. Retail might be slightly better than expected but do you expect people to really buy given that unemployment is only going up? I understand you will point to the fact that the stock market looks ahead but even then, how do you look ahead to something bright something so miserable? I liked this article which I read last Friday: http://finance.yahoo.com/news/Sucker-Rally-or-New-Bull-etfguide-3439763482.html?x=0&.v=1
Well, the no one doubts that the economy is not in good shape. The question is whether the 35%-ish drop from 2008 peaks already reflects this. We can come up with arguments to justify any kind of view on the market.
Hello Mister Walrus Wrote: ------------------------------------------------------- > Short SPX might be a good short term play, since > lots of people (like you) are probably going to > sell as it approaches 1100. I’m not sure that I > would bet on ending 2009 below the current level, > though. Too much good news. 1100 is 30pts away. and year end coming, what do you think market underperf PMs will do if SPX breaks 1100 and stays strong?? Shorts have been getting roasted since March.
i think before the year ends its going to 1200
You may want to wait for the market to start heading down before shorting. You may miss the first few percent of the drop, but you are less likely to have the market move against you for an indeterminate time and undermine your conviction. Or you can enter a small short position, which will force you to monitor things more carefully, with the idea that you put the position on in force when your monitoring says to do so.
I don’t know why you guys are bullish. S&P 500 is overvalued by historical standards (Based on trailing PE). I predict a devaluation. When? If Schiller couldn’t predict the “when” in 97, neither can I. I would guess sometime in the next 12 months. Or whenever people realize that negative revenue growth is a bad thing.
Effective fed funds rate now = 0.17…in 6-12 months = much higher to curb inflation CPI quarterly annualized jump in aug = 4.8%…in 6-12 months = probably equal or higher and compounding UNRATE now = 9.7…in 6-12 months = 11% Real GDP quarterly growth in 6 months, 1.0%, in 12 months, 0% Indus Prod quarterly growth in august, 1.4%, in 6 months: 1%, in 12 months: -5% Inventory levels now, low 1.3…in 6-12 months, mid 1.4. Higher inventories will be met with higher inflation, which means profit margins will fall. Our $800 billion, $725 billion, $220 billion debt to China, Japan and UK respectively will be funded with tax hike - lowering income, spending and saving. Contraction of S&P is imminent What you should be owning: hard assets, mining, agriculture stocks I woundn’t short real estate right now
There was an interesting article in the WSJ yesterday. I am not sure of the exact dates were, but the only two times in history where the market went up 48% in 6 month or so was 1930 and 1970. In both cases it was followed by a large down move. I believe that the government manipulation of the RE market will not solve everything. The $8000 tax credit is due to expire in November. Rates will eventually head up from historic lows and consumers are in no better shape financially than 2 years ago. I put my money where my mouth is 
I went all cash two weeks ago and I feel better watching from the sidelines at this time.
I’m going fibonacci and short selling at 1120.
mark@dirtbags Wrote: ------------------------------------------------------- > I’m going fibonacci and short selling at 1120. ^amazing how fibonacci predicted the exact bottom. or should I say the CTA’s and HF that follow momentum strategies all bought at the same time when fibonacci kicked in?
long china, long india, short USD, long gold, long israel, short japan, short russia, short FTSE long TSX, short 10 year UST, long 2 yr UST short pluto long mars. neutral S&P
Deflationary arguments: 1. Rising Unemployment (though at a reduced pace) 2. Rising mortgage delequencies 3. Declining consumer credit Inflationary arguments: 1. Increased liquidity due to low interest rates 2. Investing in money market doesn’t make sense for such low returns Combination of the 2 arguments suggests - Deflation for Goods and Inflation for Assets (Equities). If I were to take a position, I would continue to ride the bull while it lasts, but stay away from derivatives and leverage to reduce risk of being caught offguard by bears.
mo34 Wrote: ------------------------------------------------------- > There was an interesting article in the WSJ > yesterday. I am not sure of the exact dates were, > but the only two times in history where the market > went up 48% in 6 month or so was 1930 and 1970. In > both cases it was followed by a large down move. > > I believe that the government manipulation of the > RE market will not solve everything. The $8000 tax > credit is due to expire in November. Rates will > eventually head up from historic lows and > consumers are in no better shape financially than > 2 years ago. > > I put my money where my mouth is I went all > cash two weeks ago and I feel better watching > from the sidelines at this time. Yeah, screw America, right mo34?
ConvertArb Wrote: ------------------------------------------------------- > ^amazing how fibonacci predicted the exact bottom. > or should I say the CTA’s and HF that follow > momentum strategies all bought at the same time > when fibonacci kicked in? I think it’s becoming a self fulfilling prophecy.
I’m still mainly equities for my personal portfolio but I’ll be cash by year end. I’m thinking strong pull back in December/January. The current plan for 2010 is back into Chinese, Indian & Brazilian equities for growth coupled with some solid developed world companies.
Soddy - got any color on that? I don’t look at international equities so much. Looks like you might know something.
it is interesting, i am a bear, but won’t get in the way of inflationary data and basically all indicators pointing up, until they all point down. the problem, yes, the spy is up 50%+ since march, but he USD is also down 20%+, so the rally of the SPY in other currencies is not so impressive. another thing, all commodities have been jacked by the 20%+ down move in the USD, making their gains less impressive as well. most of the equities that have taken a moon shot get double leverage to a USD move (in both the commodity and the equity value in another currency). you guys are focusing in on sectors and prices levels. its all meaningless if we’re either going to get 50% inflation or 50% deflation; or in turn, 50% devaluation in the USD or 50% gain in the USD. this is what actaully moves the market. don’t think of how market participants will react to market prices, think of how market participants will act when the real inflation figures are known and felt. (you have to remember that 2/3s of the western population does not understand what inflation really is, and either 80% or 20% of economists don’t understand what inflation really is, depending on whether the keynesian or austrian school is correct in defining inflation - maybe neither is right)