October 17, 2012
Still Buying Stock Indices
Start with chart below…Does it look weak? Yes, the market went down a few hundred points last week, and right on cue, 90% of commentators were hyping, “ Here comes the big one! Run for the hills!”, but really, take a look at this picture and ask yourself if last week’s action looks like anything more than a tiny blip on the downside.
Sure, this thing can quit at any time, but do you really think it is going to conveniently turn south, and maybe for the first time in history, all those seemingly unanimous, never ceasing doubters are going to be right? Have you EVER seen a stock market top correctly predicted by the media? My absolute experience has been you need to get worried when nobody else is worried...I CONTINUE TO EXPECT SOME SORT OF UPSIDE LIFT OFF IN STOCKS. I AM STILL A BUYER.
So that’s what it looks like…
And here are more absurdly negative headlines I’ve collected during the past few weeks…While there are certainly SOME people out there who are bullish the market, from my vantage point, they are few and far between…
And these are from today…October 17th.
Come on! Maybe I will be the one who ends up looking like a fool, but isn’t this kind of obvious? Investing IS a mob psychology game…and part of the game involves scaring people to be backwards in what they ought to be thinking…My opinion anyway.
Here are couple of options I like…Or you can buy futures with stops under the most recent low….
Here’s another way to go…..
Still Buying the Eurocurrency
I have been buying, and continue to buy, the Stock Market Indices AND the Eurocurrency…which, as you can see on the chart below are both pretty much the same trade.
As you must be aware, all of the rhetoric against both of these markets has been of one flavor: THE SKY IS FALLING! Or going to....
Think back to a few months ago…and how LOUD the negative sentiment was toward Europe and the Euro…how, according to the media hype, the currency was so undoubtedly headed for oblivion?
Now look at it…a full 10 points off its lows and MAYBE just getting started…If this isn’t a very fresh clue as to how the markets actually do work (a game, mob psychology, etc.), there never will be one…I AM STILL LONG THE EURO, AND STILL BUYING.
And one more time, I will bang it home…All those headlines implying “you are an idiot if you think stocks are going higher” are NO different than all those same headlines that hated the Euro three months ago.
Give me a call if you are interested. There is a lot going on right now…
FUTURES TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own account and has financial interest in the following derivative products mentioned within: LONG EUROCURRENCY & LONG MINI NASDAQ.