Before Monday Morning
July 20, 2008
Before you go out there with any new market or limit orders, I want to remind everyone that the best bottoms are NOT created from a heavy volume selloff that is immediately met with a higher volume, railroad track building, trading range. All of the indexes show signficant cautious and bearish outlooks with everything trending lower, below the 50 and 200 DMA’s, and with oil, metals, mining, and gold possibly topping (I think they are) there is only one group leading us higher now. And whenever you only see this group lead, you can be sure the market has some struggling left to do: medical stocks.
Unless you have any new buy orders for anything other than medical, I must recommend that you keep your portfolio in 70% cash or higher. IBD suggest 100% right now, so does ‘the perfect speculator’s scans’ from Brad Koteshwar from his two brilliant market books. The best traders of all-time, right now, would not be looking to get long stocks here. Like I keep telling subscribers, study the chart patterns of my past big winners, especially 1999 and 2003 which were extremely strong bull markets. Until we see THOSE EXACT SAME PATTERNS SHOW UP, calling a bear market bottom is as foolish as it is calling for an oil top right here after eight years of non-stop gains.
Be careful out there. Why? Because I want to see you all right here when the next bull begins. And unless we slip into a recession, I would think months, and not years, will be needed. Aloha and I will see you either Monday or Tuesday in the chat room. I am under orders to keep my feet elevated due to me having a “staph infection” in my lower legs. It could have also been a reaction to the beta-serun shots. Right now, they don’t know. It is being labeled as unknown. I know what it is…it sucks! One week of being trapped in a room keeping your feet up on the desk is getting REAL OLD. Hopefully, though, mentally, I am refreshed a bit. I needed the rest. I was getting loopy there. 
ALOHA!!!
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5 Comments »
Other markets, such as the UK’s FTSE 100, never regained their 2000 high. Japanese stocks have still to approach the peak they set in 1989.
Its amazing that the Nikkei hasn’t regained its peak of 89, very scary.
As for valuation, cyclically adjusted price/earnings ratios need to be far below their long-term trend. They are above it.
We need earnings to start ramping up once again…Banks and Investment banks have had their earning power TORCHED! Where are our new leaders, I would be paying attention to the IBD industry groups that are rising within the ranks!!
Good luck with the staph infection. Hope you’re back on your feet quickly.
Thanks for all your efforts.
Steve