BLINDED BY THE BEAR?
27 August 2009 by Cullen Roche
9 Comments
I know I’m not the only one who might be guilty of selling into the rally a bit early. Credit Suisse provides the other side of the outlook:
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Comments
In this interview and elsewhere, I’ve heard that because everyone is expecting a big correction, it may not happen. However, you posted an article by State Street Research that investor sentiment is at an all time high. I guess it’s a bit confusing.
Looks like CNBC is having trouble with their site….
Here is the direct link: http://www.cnbc.com/id/15840232?video=1228678548&play=1
Gregg,
This is one of the most confusing times in investing history. I don’t think anyone knows what is going to happen next….
Deep down we feel it. We just fear the consequences.
How is it that there is this overwhelming bullish sentiment, yet there exists a “consensus” that a correction is forthcoming?
Seems like a contradiction to me.
Don,
the psychology of price is driving the markets. Higher prices are validating the belief that the worst is over, and greed is picking up bankrupt companies thinking they’ve stumbled upon overlooked treasures. Buying any and all dips has been a very effective strategy for weeks now, and it will continue to work until there’s no one left to convince these inflated prices are worth it. Right now market participants are playing the game, even if they don’t believe in the rally, convinced that someone else will be holding the bag when the music stops.
Think about what higher prices mean to all of us. A down payment towards a house, putting a child thru college, paying off the mortgage. A lot rides on keeping prices at these levels. But if economic reality doesn’t confirm what is nothing but hope now, the selling will be swift. March wasn’t that long ago, and people still remember how they felt and what it meant when we touched the current lows. Andwhen everyone rushes towards the exits at the same time, ……
I don’t know how anyone can trade in a market like this and think fundamentals precede price. Psychology seems to trump all else. God luck to all. We’re truly living in an historic time.
Don because the environment really isn’t as bullish as some people say. Besides, I don’t care what people THINK. I want to know how people react. And everyone is still really skittish. Like last month when we were like flat and slightly down…like 7%…you remember with the ‘head a shoulders’ bull crap everyone was talking about? Well there were incredible inflows of money into defensives and a huge percentage of shot interest. Everyone was PREPARING for the next leg down. Woohoo!!!!!!!!!! The same thing will happen again. Actually, stupid people will just buy it up so they can get in line for the next leg up and stupid shorts will get squeezed again. So investor sentiment doesn’t mean sh*t. And I don’t care what fancy charts and magical unicorns people have that designates a market move this way or that, all I know is there are a lot of people who want to short on a ‘correction’ and a lot of people who want to go long on a ‘correction’ and there was supposed to be a ‘correction’ the past 400pts on the S&P…never came. And people are still holding out for that ‘correction’. But they won’t wait, eventually they will plug their noses and jump into the murky waters where they will be eaten by sharks…as my dad said, ‘it is a big scam anyway’. I think that is clear by Henry Paulson and his get rich schemes of revealing that he owns a stock popping it up 10% and then probably selling it to the losers who buy it from him…
I don’t know how anyone can trade in a market like this and think fundamentals precede price. Psychology seems to trump all else. God luck to all. We’re truly living in an historic time.
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I’m really not trading, I’ve doubled my money (could have done a lot better). But why risk it? I am a freshman in college who has been trading since January. But I have been watching the markets since middle school and I love how I can feel involved in the WORLD rather than be stuck in a boring life of going to school. But, you have to ask yourself, why should you even care about making a quick buck in these very treacherous times if you don’t need to? There are always opportunities, but wait till it is not so screwed up. The VIX may be low, but the markets are on edge and it is being held up by weak hands and government printing. If there was no government stimulus and illusion being created, I would imagine that people would have come to the realization that the system has been destroyed. But as long as there is international cooperation (like buying worthless T-Bills), then things can still move on. I always told my dad when BAC was plunging to 2.53 (I remember that day because I bought at 3.17 that same day and I was like WTF! LOL), that as long as the government can sell its debt and the there is faith in the FDIC (no bank runs) then things can be fine.
Groundhog day – wake up and its summer 2008 all over again.
Is it just me or does CNBC Europe seem a lot more sensible than ours?