DOW: Set up for a big sell-off (massive profit taking)?

[grubs50]

rglenn,
I understand ur point and that is y i personally believe it is a bit high and the big boys r just pushing it (by obviously buying!)higher inorder to sell-off and make massive profits. I personally still believe the DOW will still go as low as 9140 - 9150, if not lower, within the next 2/3 weeks if not earlier

 

[oatman]

Serious buyers and sellers are on vacation but the drip feed of $$$ continues. I think that's why we've drifted higher in light volume recently.

 

[grubs50]

my exact sentiments 2

 

[Skimbleshanks]

Irrespective of whether the market is overvalued or not (I actually don't know or care), you have to remember that only the big boys have the buying/selling power, expressed as volume, to turn markets.

And certainly in the futures markets, if the big boys are going to turn the market they need to push it up as high as they can in order to get good prices for their shorts.

It takes a lot to turn a market, and it will take them some time to accomplish it, so perhaps this bull run is just them getting into position. Never ignore the big boys, just follow in their footsteps.

 

[2468steve]

Skim,
agree, never stand in the way of a speeding train,although what the big boys were doing was one of the points I was trying to make when showing the positions of COT.
Cheers

 

[rustic1]

How do you know when the big boys are getting into position?

Rustic

 

[2468steve]

Commitment of Traders report will show you the net positions of traders in the market.

cheers

 

[grubs50]

u know cos reality goes out of d door........lol

 

[andycapp]

dow way 2 high

absolutely correct grubs.

the vix (complacency chart in us)
the low volumes
the bond yields
and data in us pointing out how investers r getting carried away again thinking the market will keep rising spurred on by overzealous market analysts points 2 1 thing.


we r on the verge of a major correction poss 15-20%.

just gotta hold tight till they all panic sell

keep watching this space

something will happen within poss 6 weeks all the data points 2 it

 

[andycapp]

the dow j is massively overvalued- and i agree with grubs
of course the big question is when the correctoion takes place

i just hope its be4 i go on holiday lol or i'll be swimming there myself

 

[kevinmcm]

"something will happen within poss 6 weeks all the data points 2 it"

Thats a safe enough statement. I seem to remember saying something along those lines not long ago and it happened, it went up! I dont think we will see that much of a correction. The so called expert pundits are busily moving goalposts as I type. Never underestimate the power of manipulation.

Why do you say 15-20% correction, what are you basing it on? ARe you saying 15-20% down from where we are at the time or 15-20% down from a move up to the point at which it turns?

I'm a day trader so what people are saying will happen in 6 weeks is not really of consequence until it happens. Play it as you see it and make money playing it in both directions.

Kevin.

 

[frugi]

I agree we are due for a savage correction. However remember this gem from George Soros:

"Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognise the trend whose premise is false, ride that trend, and step off before it is discredited."

and from Keynes (I think):

"Markets can stay irrational longer than most of us can remain solvent".

In other words, doing the wrong thing at the right time is often the better course than doing the right thing at the wrong time.

Sure we all know the market is complacent, overvalued, manipulated, that margin debt is high, that the SPX and Naz have not confirmed the Dow breakout, that volume is appalling, that banks must be suffering immense pain from the bond collapse etc. etc. but the simple fact is if people are buying the market goes up.

For what it's worth I'm going to put my faith in the multiple Fib timing projections that point to this week as a major turning point and call for an intermediate top. We may even have seen it today - especially if the Dow fails to close above 9400, but I'd like to see confirmation before leaning to the short side.

There's a similar story on the Dow and Russell 2000 but I ain't done no piccies for that innit

 

[grubs50]

andycapp, i think u r in luck cos i can c d first signs...........

 

[2468steve]

needs to break thru' tho,or could just be testing old resistance for support

cheers

 

[grubs50]

i think i spoke 2 soon........lol, crazy crazy Dow!!!

 

[oatman]

Timing, timing, timing........

 

[2468steve]

p/e for S&P is 33,giving a yield of 1.5%,compared to bond yields of 4.37%for 10 year,and 5.25% for 30 year.
Historically, the S&P 500 has a price-earnings ratio of 13. At bear market bottoms, the ratio is closer to 5.Therefore earnings need to rise significantly,or price come down. Bond yields are at multi year lows.....
Inflation is minimal,which suggests companies will have difficulty increasing margin,and most earnings this qtr have been boosted by cost cutting and currency movements.

Cheers

editosted in reply to barjon,whose post now seems to have disappeared.

 

[barjon]

Thanks Steve

Found the answer myself so deleted to save people the
trouble. Sorry to have put you to the bother!

Thanks again.

jon

 

[Bigbusiness]

This is a chart of this years Dow v Last year. We are near a turning point from last year that led to new lows. I don't suppose the Dow will follow last years direction and I have given up trying to guess the top.

 

[rglenn]

That's an excellent comparison chart BB.

It looks likely that the Dow will see some profit taking soon which means a drop of about 150 to 200pts.

Before a another climb upwards.

Sorry for the simple assessment but that's the way I work.