Stock market going up or final spike of the bear market rally?
Posted on 30 July 2009 with no comments from readersMike Swanson is an up and coming online financial commentator. But I wonder if what he sees as proof that the stock market rally has legs is not actually the final spike in a very strong rally. If that is true then shorting the S&P or Nasdaq would be a good idea.
But then again markets going up have a momentum and betting against a rising trend is seldom a good idea. So I am stuck and rather confused. Perhaps that is how Mr Market is feeling today.
But the rational explanation is that stocks have gone far too high considering the global recession now upon us, and the really very slim chances of a significant recovery in the near future. Markets can of course remain irrational for longer than a short can stay solvent.
However, I think it is too late to party and that the danger of winding up in deep trouble is too great. Keeping cash and being brave if and when the market collapses looks a surer trade in my book.
no Comments posted by readers:
“Keeping cash and being brave if and when the market collapses looks a surer trade in my book” Come on Peter you have been saying the same thing since the market started this once in a lifetime rally in March. Every now and then you come up with the same silly article and headline “Is this the last spike in a bear market rally?” Call it a bull or a bear or any other animal you like, but this was one of the best money making oppurtunities in a generation…wehther you like it or not.
I migth agree with you that one must get out of the market when it went up by 10% or 12% in 2 or 3 week. However, you go out to re-enter at the pull back and not to stay on the side lines till it goes up again. You have been spreading pessimism even when people started feeing a bit of hope. So try to stop that….Your artciles are becoming like a broken record. It’s the same story sine the DOW was 6500 and S&P was 660. Every single time you were wrong and markets keep on going up
With all due respect, but I really wish that no one followed your advice. If anyone did, then he must be a very sad man by now. I never made money in my life like what i made in the last 5 months in equities, in this last so-called “spike in the bear market rallyr that started in July” i made 45% on my portfolio in two and a half weeks. I took risks there no doubt about that, but in the middle of such a massive rally, you will be a very unlucky guy to go wrong. I’m not bragging about my gains, but if anyone has entered the market in March or April and then entered again in end of June / early July, then he could have very easily doubled his portoflio. You don’t need to be buffet or Soros to do that.
So when will you be bullish on equities and commodities Peter? When the the global economy starts growing again sometime in 2010 or when trade recovers by perhaps end of 2010 and early 2011? And where do you think the market will be by that time? everyone will be very bullish on equities and commodoties….right?
In my humble opinion that will the market peak and it will be the best time to sell and enjoy your profits
You need to admit it peter, you got this one totally wrong the same way you got Dubai real estate totally wrong in 2008.
Ed note: pride comes before a fall, let us see if you hold on too long and perish. I have missed calling the rally but a 50% rally after a stock market crash is usual, and that is almost done. Have you not noticed the world is still in a staggeringly deep recession? We are far from the bottom of this bear market.