Posts Tagged ‘Stocks’

Vindication ?

The Wall Street Journal

Announces

The Worst Decade For Stocks EVER!

“The U.S. stock market is wrapping up what is likely to be its worst decade ever.

In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.

Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.”  TOM LAURICELLA WSJ digital December 20,2009.

I started aggressively moving clients out of Stocks and into T-Bills during the 2000-2001 market blow-off and then again in late 2007.

This appeared foolish to my clients, family and friends many times during the last nine years.

But my evolving

Asset Allocation Model

has kept my client’s investments and retirement plan assets SAFE.

BUT NOW

“Danger Will Robinson, Danger!”

The Worst Is Yet To Come!

So Stay Tuned.

Remember Gentle Reader – the best strategy is still:

Recently I we reviewed the classic head and shoulders top formation.  The Dow had formed one and sucked a lot of analysts into recommending selling or shorts.  But we weren’t fooled because it never broke below the neckline by a decisive 3%.  What I also didn’t tell you though was that the Commercials had been buying!  I didn’t want to give away my hand. .

But we have been waiting months for this bear market rally to resolve.  We are getting closer.  As the Commercials unload their positions at the end of this rally, it will probably mark the last opportunity to sell stocks at reasonable prices for several years.  The decline from the top of this rally will be absolutely devastating to most investors.

Remember what I said in earlier blog posts – it will be hard to sell at the end of this bear market rally because all the talking heads and headlines will be positive about the Obama recovery etc. etc.  It is almost impossible to fight the herd!

AGAIN

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

When Markets Correct Primary Trend Moves They Can Be Very Complex and Confusing.

What Should I Do With My Stocks and 401K Now ?

Where are we right now in the US Stock Market ?

What should our investment attitude be?

Point 1. The US Stock Markets entered a primary bear market in late 2007.

Point 2. In terms of Price Earnings Ratios, Dividends, Q-Ratios and other measures of value, the US Stock Markets were historically overvalued in 2001 and 2007.  This Bear Market decline will most likely not end until the US Stock Market is at historic lows in these measures of valuation.  The US Stock Markets will have to fall a lot more before that happens.

Therefore our current presumption is that the Bear Market is NOT over!

The current wave of talking head commentary regarding the beginnings of a new bull market are very likely wrong and will suck a lot of unwary investors back into the markets before this rally is over.

Its just a fact of life, Market corrections are usually very messy and unpredictable.  This rally in a Bear Market will be both frustrating and confusing.  Here are a couple of possible scenarios:

Scenario 1.  Consolidation.  The stock market will Consolidate (messy sideways action) here and then run up to a bear market rally top.  Action, sit tight and sell any remaining stocks at the end of the rally. Then….

SELL, SELL, SELL ! at the Top of The Rally

Scenario 2. Deep correction There will be a dramatic drop in stocks that scares the Heck out of everyone and makes it appear as though the rally is over BUT the stock market doesn’t break down to new lows.  Then the market frustrates the bears and rallies up to between 9,000 and 10,000 on the Dow Jones Industrial Average.  Then….

SELL, SELL, SELL ! at the Top of the Rally

Scenario 3.  WE ARE WRONG and the markets break down with one of the Dow Indexes breaking to a new low BUT the other Dow Index doesn’t confirm thereby setting the market up for a Dow Theory Buy Signal when both indexes then better their May highs.  IF this low probability event takes place, I will BUY, BUY, BUY

If any of this is confusing PLEASE drop me a comment and I will provide additional explanations and resources.

What Are All Those XXXX’s and OOOO’s on the Charts?

Several readers have indicated that they are not familiar with the point and figure charts that I use for illustration purposes in the blog.  John Murphy (world class technical analyst) provides an excellent overview of Point and Figure charting on his web site StockCharts.com.  If anyone is interested in why I use these “old fashioned” P and F charts drop a comment requesting additional information.

The next leg down in this Bear Market (after this rally is over) could be absolutely devastating. So, IF you still have a substantial portion of you investments in Stock, you must be ready to liquidate those positions at the end of this rally.  If this is the case please contact me so I can provide timely advice and guidance.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

Beware

The current Bail Out Bubble Rally will probably end in the Jaws of the BEAR !

So Dear Readers, Stay alert when the Dow breaches the 9000 level.

This is My Evolving  – Market Decision Dashboard©

(it is at the graphic artists and won’t be ready for a week)

The complete version is a Cube with Risk Levels across the top and Client Profile down the right hand side.  You will be able to click on each underlined item and drill down to specific information.

Click to enlarge

This is a Map of the Markets laid into Quadrants for Asset Allocation purposes.

Please Post Comments – Is it self explanatory OR is it confusing OR do you have questions ???