Is it Time?

Is the bottom in? Have we seen the worst this market has to offer? What was Friday all about?

I was bullish Friday, even as the day started out well to the downside. Exactly what I was hoping for, but would have preferred buying in a little lower. It may not matter.

Mortgage rates are dropping and should put millions of dollars each month back into the economy. I saw some rates under 5% and we'll probably go lower too. Have you seen what treasuries are paying? How about the G fund? If you haven't noticed, the G funds rate of return has dropped significantly lately. This is really very bullish stuff, if it holds. There's not really much return in these instruments. How long do you suppose that cash will sit there?

Let's see, interest rates are paying dismal returns and Real Estate is going to take a lot of time to become investment material again. Once the masses finally figure out that Western Civilization is going to be around for awhile they'll pile back into stocks like nobody's business.

I'm only Intermediate Term bullish at the moment, but could go Long Term if things play out the way I think they're going to. The bears are still out in force (and that's a good thing), but Friday's late reversal may have been a warning. Not to mention the low volume sell-off we saw early in the day.

If one has a long time horizon, I don't know that I'd be looking for "the" bottom right now. But that's just me and my indicators are just that; my indicators. I'll still be trying to time the market, but I can't see myself going all cash at these levels. The ride back up could be a lot faster than some think. It's all about risk. And risk is not a one-way concept. :cool:
 
How much longer can the whales afford to sit in Treasuries and the US Dollar is my question. We're into a new fiscal year for many of these guys and they've got some ground to start making up. If some equities are 'cheap' like some keep saying, I don't expect them to be 'cheap' much longer. I see some buying pressure for at least a few weeks.
 
I'll play devil's advocate. The reason being that we're still below resistance and overbought short-term. One of those could change this week. If we can get over 900 and then pull back toward oversold, I'll feel better about playing for a bounce.
 
Thanks Tom. We need a devil's advocate. My intent is not to convince any one of doing anything, but to realize that depending on the kind of investor you are there is real risk on the upside in spite of the continued bad news. Two trades a month is very limiting so being out of trades early in the month while sitting in the G fund may not be a good thing if the market decides the all clear has been sounded.

In this market environment, volatility should be embraced or the whipsaws could be devastating. Risk needs to be carefully measured and a neutral bias towards the markets is key. I certainly recognize the underlying fundamentals are very challenging, but we have a new administration taking over soon, although he seems to be very active already. The world is waiting for his fresh approach to what's seen as a very dismal legacy of poor management by Government officials. This should also be viewed as potentially bullish.

The possibility of an explosive move to the upside should not be taken lightly any more than continued weakness. The opportunity of a lifetime may be at hand, but we won't know until it's in the rearview mirror. It seems to me that taking a position in the markets should not be an all or nothing proposition right now as being wrong on either side can have big consequences. At the moment I'm all stocks for an expected move higher. If it's large enough I will do what I did a couple weeks ago and slowly scale back, but I can't see myself having a big cash position at these levels.

Risk management is important, but I believe we should be looking both ways given our trading restrictions.
 
<<I believe we should be looking both ways given our trading restrictions.>>
Absolutely!
 
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