Don’t Let The Stock Market Blues Get You Down; Another Bull Market WILL Come. They Always Do
July 27, 2008
The kind of market that we are in right now is obviously not the kind of market environment I prefer to invest in. There are so many “smart” fundamental guys that tell you to buy this bargain now that the price is depressed here or there. But I am here to tell you that if you did not cut your loss (like we did; plus take out some big gains) on MTL you can see how buying a bargain can quickly turn into a bloody mess.
This market is a market that should be avoided by all but the ultimate professional. These pullbacks are not to be bought until we get some accumulation to follow the lows. There are very few charts out there that look like MANT or ARST, for example, but there are a lot of MTL type of charts out there. That is my cue to stay far away. I know when to get heavily long on full margin and I know when the storm is coming and it is time to batton down the hatches. In November I sold all of my mutual funds and told all of my subscribers that we were in for a top. I did not think the top would be so odd. I thought it would be easy to make money on the short side, similar to 2000-2002. However, I am very wrong. This is the most difficult market I have personally seen since 1996. This is way more difficult do to the daily volatility in some individual trending stocks. This kind of wild action used to not occur. Now it does.
So what is an investor to do? Easy. Do nothing until things shape up. The charts are ugly and there are not too many ARST, MANT, and XSI type of setups out there. Even then the chances that it last is very low. These kind of hot patterns have a tendency to fail right when they are supposed to take off. So buying them up here can be very dangerous. Thus this is how it is in a bear market. A market that has seen the Nasdaq come off 20% since the November top.
Those of us around a long time know that the summer dolrums for the market is a normal thing. This summer is no different. However, so many of you think that the market is doomed and never going to come back that that is the exact fear that ENSURES that the market WILL come back. I am very nervous right now, I don’t like watching my capital vanish, while I do not make money in the market. It is the first time since early 2002 that I believe I have had this problem. The biggest problem is waiting to see when things will change. Since we have real stocks in banking, automobiles, and airliners all in trouble I have a feeling this could last longer than you think. By keeping you out of a wild highly volatile market I believe I am doing you a major favor in making sure that you will have more money to work with when the time is right.
For those that do not know how the market acted in the 1970s, you can be sure there were many stocks that made 100% to 1000% gains. You just have to be in the right spot during the bear market rallies that will always occur. I promise when those moments come I will be able to make a decent profit while we wait for our next real bull market. Which we probably will not see until we get another pro-USA and capitalist President in the White House. If we get some one against free markets in office, it could be a very long four years. Luckily, there will be bear market rallies for us to take what we deserve when we get it.
For now, love your family, spend time doing something that makes you feel good, and when the market starts throwing out more charts that look like my past big winners (STUDY THE PAST BIG WINNERS LONGS IF YOU HAVE NOT ALREADY!!!!!!!!!! I AM SERIOUS. MEMORIZE THOSE CHART PATTERNS. BURN THEM IN YOUR BRAIN) I will let you know when it is time to get fully long again. For now, take a chill pill and do not force anything. I will let you know when it is time to get active. It is a bear market you know. And if you know Jesse Livermore, you know what you should be doing. Nothing. Unless you are a master short seller. 1% of you are. So think about it real hard if you are the 1%. You probably are not. I know I am not.
Aloha and I will see you in the chat room where the bear market is starting to show its toll. That means more one-on-one time for those that are learning. Don’t be shy, if you are bored stop on in. I believe this weekend was the quietest ever. I am back to 100%, fully rested, and feel mentally sharp. I hope you do too. ALOHA!
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great to hear you’re doing better J, surf’s up!
w-
Yes, I finally got to get wet today at breakwall. I got 5 fun lefts, 2 were semi-epic (for me) and that was that. It felt good to get back in the water.