Wednesday, November 12, 2008

Back to the bottom ... again

Remember the +11% day on October 28? The S&P 500 is less than one half of one percent from erasing it completely.

It's also only 1.5% away from reaching the all-time intra-day bear market low of 840.

For the umpteenth time: I never make bull market investments in a bear market.


John from Colorado said...

Thank goodness for stop losses! While you were in cash, I was riding the roller coaster a bit. I feel a bit queezy but like most roller coasters, I ended up the same place I started. I took a number of positions, some realized gains and some realized losses. So a bit like the kid who gets right back on the roller coaster because of the thrill, as an adult who is slightly less child-like, I am patiently waiting in line for the next ride. Having said that, your continued reporting of the indicators you monitor is very helpful. I will be looking to get into shorter term long positions when your indicators point to a bear rally. Of course, I will immediately set my stop losses and fasten my seat belt.
On an other note, I'm interested in the fact that you didn't recently get into your bear position. You had mentioned in an earlier posting that the market appeared to be setting up for another bear run which seemed to happen sooner rather than later (over that past 4-5+ days). It suggests to me that your indicators didn't clearly (high probability) suggest further drops in the market over the near term (a month or two?). Given your previous post "Neutral", I would expect the indicators to have turned more bullish (bear rally bullish) the past couple days as the market has fallen. Is the market setting up for a bear market rally? I'm in line waiting but I'm watching that roller coaster race down the hill and I'm getting more excited for my turn (up and out if possible). Thoughts?
John from Colorado

Jody said...

Hi John,

I'm glad to hear you made it out unscathed at least!

That's right - that last multi-day rally ended before my indicators formed a consensus, so I didn't get into the bear fund.

As for the next phase, the indicators are nowhere close to making a confident rally prediction right now.

John from Colorado said...

Thanks. That is super helpful. I'll stay tuned.
John from Colorado