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Posts Tagged ‘ 1937 and 2007 comparison ’

Dec 02
Thursday

Germany Dax Roadmap

Filed under Stocks

Germany Dax Roadmap
Germany Dax Roadmap

All our proprietary indicators are at an extreme. One by one they trigger a warning, some beyond 2007 overbought levels. Such is the distortion in the markets with government intervention. So beware and have a very long leash on the indicators. We looked at some conventional indicators above - the RSI at 2007 peak for the Dax versus current RSI and Dax movement. Obviously it is just imagined, we see what we want to see - but when combined with our indicators warning extremely overbought conditions (assuming they work!) - we are happy to maintain our shorts. We plan to maintain our portfolio of stocks (longs mainly) to hedge against our shorts.

Interesting point to note is the above scenario follows the 1937 model very closely - uncanny.

In general we are long (as close to) cash backed miners with no debt, and short retail with crazy PEs no matter how great the business is (eg: Amazon, Salesforce). It is risky shorting tech stocks due to acquisition risks. Google is rumoured to be acquiring 2 year old Groupon for $8 billion dollars. (warning: if something like Groupon can be worth 8 billion, then I am not sure if Salesforce is overvalued at a price tag of $19 billion (PE >250)). So short with care.

Also, Google will be launching a bookstore to take on Amazon. With Apple/Ipad and Google taking on Amazon on a background of decrease global growth/spending, margins and growth will be capped in our view. We cannot find any mainstream analyst being bearish Amazon at a PE of 70. These analysts will be singing a different song soon.

Goldman Sachs and Merrill Lynch are now bullish on Japan - full article here. Amazing how not long ago everyone was shorting Japan thanks to the Chinese sailor drama plus strong yen but now its on an “uptrend”. Its comical. For these guys to profit, they need volatility. Something moving in one straight line up or down is not going to generate the profits GS hopes for.

Trades:

1. Our target for Dax short term is 6950 - short $5/point 6950. Those who want to milk every last drop out of their trades can short at 7000 (nice round number). Note in 2007 it reversed upon achieving 8000.

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Protected: Close Up: 1937 vs 2007 | 4 September 2010
1 response - Posted 09.04.10
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Protected: 1937 vs 2007 Bear Market Comparison: Updated September 2010
1 response - Posted 09.02.10
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1937 vs 2007 Update
no responses - Posted 03.14.10
X axis: number of days since the start of bear market Y axis: Percentage from top Red: Current decline Blue: 1937 crash If markets rallies to -20% that would be a DJIA target of 11300. We are still trading as if the top is in. Stay light ! continue
Short on Rallies
1 response - Posted 01.28.10
We fired our first short way back in July 2009 at the textbook Head and Shoulder pattern - when the H&S pattern was so obvious that it was even quoted on mainstream media. We should have known better that when it is clear to everyone, then that's the least likely ...continue
1937 vs 2009 Bear Market Comparison Update: 22 Jan 2010
2 responses - Posted 01.23.10
For new readers, here are our previous posts comparing 1937 to 2007: 1. Using Fibonacci Numbers to Predict the Market 2. Comparison 1937 vs 2007 Quick Update 1937 vs 2007 Bear Market Charts: (Blue: 1937 ; Pink: Current Bear Market; Y axis: percentage from top; X axis: number of days from start of bear market) So ...continue


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