Monday, January 16th, 2017

Stock Market 2008-diving off a cliff

With My system you can make money from the stock market during recession-no matter how bad the Economy gets-Click her and read more

The market has seen nothing but down days since Obama was elected President on November 5, 2008, until Friday when it made a near 500 point rally to the upside. The market internals have been nothing but ugly. Twice the DOW came and touched 8000 and finally it broke through and plunged to the levels not seen since 2002. That means all those investor’s, pension funds, savings and monies are wiped clean and done with or have taken huge hits.This is an unprecedented market action not seen in number of years.

Announcement of Tim Geithner as the Treasury Secretary, however sent the market 500 up in a knee jerk rally. Quite frankly it could have been Mickey Mouse named as Secretary of Treasury and the market would have done the same to rally from deeply over sold conditions. Days and days of selling created those conditions and it may bounce higher for few days.

What we have seen in the past 2 months will again be true. Bears feed off these rallies, buyers go in there and get trapped and killed. What I have seen, the market can’t even piece a few days of back to back upside action, let alone rally higher to new grounds. There is no catalyst out there if you looked for one. The economy is under the weight of myriads of problems, like Auto Makers bailout and others. Banks and financial stocks being hit with problems. Citibank announcing lay offs, and JP Morgan Chase following the same. 

 

We may see few days of bounces and sharp rallies and if history is any guide, the market will eventually sell off again. The broad consensus is that we may see 6000 levels before we see 8000. But who knows where that bottom is? Every prediction has its own flaws and cannot be taken as an absolute truth. 

 

Therefore what can you do to make money? One of the best positions is to stay in cash. Yes that is a position. You don’t have to trade everyday if you can help it. As a result, all our newsletter subscribers have not lost a SINGLE PENNY since September 2008. Compare this to other newsletter services who kept rolling off trades month after month, and and ended up taking huge losses that cannot be recouped for 2 years. 

 

The other things I have done is micro trading ultra short ETFS like $SKF, $SRS, $SDS, $SMN, $TWM, $ EEV $ FAZ and numbers of others. But these are Speculative Trades, meaning they carry a higher amount of risk and bigger rewards and cannot be done unless you have nerves of steel. I myself have not taken many chances since the movements in $SKF, SRS are 30 to 40 points each way and the volatility ranges 100 to 150%. When the market drops you go long place a stop loss order and hope for the best. When the market rallies, you sell short and place your stops and quickly scalp profits. You have to be quick on the draw to make it. Cannot hold overnight as the markets often gap up or down. This is what most experienced traders and hedge funds and others I have seen are doing these days. That seems to be the only viable game on Wall Street. 

 (Photo courtsey Getty)

Comments

11 Responses to “Stock Market 2008-diving off a cliff”
  1. Eric says:

    Excellent write up. I agree, the Ultra Short ETF products are a great choice to go long in his bear market. I believe that the fate of the market (in the short term at least) lies with the auto industry.

  2. Travel says:

    no crisis….

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