13 replies to this topic

[hiker]

which do we see first, Dow 12,000 or Dow 14,000?

please take this poll...Gary Smith has requested folks to participate.

monthly chart with the two price levels marked:

Edited by hiker, 05 May 2008 - 10:13 PM.

[StillLearnin]

Gary, I agree the board seems fairly bearish. However ISEE, $CPCE, and Ticker Sense are still pretty Bullish (not currently at extremes but pretty bullish). Has anyone ever noticed a correlation to when this board is bearish but those other measurements of sentiment are bullish? SL

[hiker]

SL - vocal and nonvocal bulls at this board seem to be active and speak up at times such as 20% corrections..or as the averages continue to make new highs if they do. generally, my experience is bulls that are swing trading here are not all that vocal, with a few exceptions. the frequency of bears who speak up seems noticeable here under all conditions, since it is so easily perceived to be a constant state of worry. I have been active at TT since about 2002, and cannot make much of the bulls who are vocal or the frequency of such...bears are always finding something wrong.

Edited by hiker, 05 May 2008 - 10:28 PM.

[pdx5]

It does not matter which comes first, 12k or 14k, I am afraid Dow will be below 10k within 2 years. The excess & all time record debts need to be flushed clean from the system.

[Gary Smith]

Thanks much Hiker/Steve. I hadn't made a single post in 2008 until the past few weeks. What brought me out of the closet was my surprise at the amount of bearishness here in light of how much we had come off the lows. I thought more traders would have believed in the March 17 St. Patrick's Day lows for several reasons. First on March 18 you had a Zweig double 9 to 1 upthrust. That was followed by a third on 4/1. We discussed this indicator ad nauseum beginning in July 2006 on Fib's forum. Yet this time around, not one mention. Admittedly, we had one or two failures over the last year with this indicator but historically failures are rare when they are triggered after the type of decline we had over the first two and a half months of 08. After the buy was triggered on 3/18 the next week we had the largest weekly narrowing in credit spreads (junk vs 10 year Treasuries) in five years. Again, not one mention of this on any of the forums. And since that time in late March, junk bonds have continued on a tear. We also had the continuing positive action in the Transports and then a Dow Theory buy signal. I'm not all that much of a fan of the Dow Theory but it is ust icing on the cake. Also, and some can correct me if I am mistaken here, but isn't shorting as a percentage of total NYSE volume at record highs as per the weekly NYSE Members data? In no way do I think this is 2003 or the late 90s but lately I see the same disbelief here I saw back then. I mean if the Dow goes to 13,500 or 13,700 does everyone suddenly turn bullish, nearly 2000 points off the bottom? Or do they just continue to call for one top after another? There seems to be a disconnect between the pessimism of the mainstream headline news and the action of stocks such as the homebuilders, retailers, and many others. I'm not all that much of a chartist but so many stocks in so many sectors seem to have made picture perfect bottoms in March. As for the sentiment polls, the only one I really pay much heed to now is Hulbert's. Presently I am 63% junk bonds funds both open and closed-end, 32% stocks (19 holdings) and 5% cash. Sometimes I think it would be less stressful if I were just 100% junk bonds. They are such smooth trenders and with the open-end you accumulate dividends daily. Edit: I hope I haven't come across as some cocky bull or arrogant bull. Lord knows this forum has its share of arrrogant know-it-alls who think they have all the answers. I don't have the answers and I don't pretend to. I only trade what is working in the here and now and hope by prudent money management I can increase my trading capital.

Edited by Gary Smith, 06 May 2008 - 12:01 AM.

[IndexTrader]

Interesting results. So Gary, here's a question: if the bulk of the people on Trader-Talk have become sentiment watchers, and are now bearish based on reading various bullish sentiment polls, what would that mean? Next question: if the majority expect 12000 before 14000, does that mean we must go to 14000? Or could it mean we go to 12500 first, then rally? IT

[dcengr]

Sung to the tune of "Don't worry, be happy" Here's a little crash I saw You might want to trade it stock for stock Don't worry, be happy In every market we have some trouble But when you worry you make it double Don't worry, be happy Don't worry, buy everything now Ain't got no money for margin call Somebody liquidated any way Don't worry, be happy The banks say your payment is late They may have to raise your rate Don't worry, be happy Don't worry, be happy Don't worry, be happy, Don't worry, be happy Don't worry, be happy, Don't worry, be happy

[pdx5]

Gary, I jumped 100% into junk bonds in 1998-1999 and stayed there for 3 years.
It saved my butt.

[dcengr]

Gary, I jumped 100% into junk bonds in 1998-1999 and stayed there for 3 years.
It saved my butt.

One of the axioms of why people shorted the market in 07 was that 'the rate of earnings appreciation could not be sustained'. The converse holds true. The low rate of delinquencies in the bond market cannot be sustained.

[Gary Smith]

>>>if the bulk of the people on Trader-Talk have become sentiment watchers, and are now bearish based on reading various bullish sentiment polls, what would that mean?<<< Index, I am not sure why they would be bearish based on reading various sentiment polls as many of those same polls were woeful in helping traders navigate a bullish 2003. It may just be me, but sentiment-wise on this board this market has a 2003ish feel to it. I recall two subscription fee gurus who posted here in 2003 who kept telling us month after month the rally had to end because of the sentiment polls. >>>>Next question: if the majority expect 12000 before 14000, does that mean we must go to 14000? Or could it mean we go to 12500 first, then rally?<<< I wasn't really fishing for sentiment as a trading or timing tool maybe just to confirm my suspicions that not just here but on a lot of forums many are bearish because of all the negative fundamental news related to the credit crisis and the housing meltdown. Yet, have you noticed how much housing stocks have come off their bottom and how last month not only did junk bonds have their best month in five years (they are actually up now YTD) but the leveraged loan market had their best month since 1997. Edit: If the Dow does see 12,000 before 14,000 I will be the first to post and tip my hat to the bears here for a job well done.

Edited by Gary Smith, 06 May 2008 - 12:37 AM.