Thursday, March 12, 2009

Let's start the insanity

This 3-day rally has returned optimism to near-record levels, and that's enough for me to go 100% bearish again. That's right: I'm putting the 50% cash position back into GRZZX, which is now at a lower price than at least one of the two previous 25% selling points. It helps that there's a potential resistance line around 775 or 800 on the S&P which will probably cap whatever momentum is left in this rally.

The last time the market was this optimistic was early February, when the S&P peaked near 870. Now that optimism is peaking at only 750, I expect the next downward leg to take the market to new bear market lows below 670.

6 comments:

Anonymous said...

Jody,

I'm an older gal who only recently has involved her head with 'finance', but I have to tell you - I'm grateful for your analysis and it's a bit of a thrill to watch you riding these waves.

Many thanks,
Catherine W.

Tim said...

This rally is ridiculous IMO. Especially the action in the banks. I don't hold Grzzx but I have short positions which I added to today.
Jody I am writing a letter to Esquire to suggest that you write a short column for them. The tag line will be "Astrophysicist turns his telescope to the market". I warn that I have no pull or influence but you need to realize your marketability. Many lay people and amateur investors can benefit from your analysis.

Anonymous said...

Hi Jody--

I ran across this site just a few days ago. I've looked back through the archives, and I'm fascinated by your investing Odyssey over the past 2-3 years. Though it seems clear that you rely primarily on basic chart-reading (trendlines, price patterns, support/resistance lines, etc.), you also make short-term decisions based on day-to-day sentiment shifts--as you are doing today. Please tell us what exactly you are looking at. What right now shows near-record level optimism?

Thanks, and please keep up with your commentary.

Paul M.

vv said...

:)

I was just thinking about asking you whether the S&P at 800 would be the point you would go back to GRZZX.

Agree with Tim. Conde Nast Portfolio.com is a also a good place.

Jon Steward taking apart CNBC and Cramer tonight was fun. It was almost cathartic.

Anonymous said...

Hi Jody,

Even the most evidence-based, logical, and successful market-timing strategy necessarily carries within it the seeds of its own destruction.

For you to publicize and disseminate whatever magic you have managed to coax into a bottle would be folly. The efficacy of your technique depends on the absence of widespread acceptance and adoption by the greater public.

If your system is as good as it has shown itself over recent months, it will make you very rich indeed. To trade that in for a little ego-feeding fame would be make a perfect Greek tragedy.

Regards, Jeff

Jody said...

Tim,

I would love to try my hand at a regular column in a magazine, particularly in regards to my general market/macroeconomic commentary. Thanks ahead of time for the plug!

-Jody