#dow 13000

[ablitz-blog-blog]

Heading for a Cliff

The market continues to puzzle me. More than 50% of the companies that have reported in this earnings season missed revenue. The ratings agencies continue to downgrade countries debt and outlook. The investment banks are all scurrying to revise GDP estimates. Companies are not hiring and are issuing cautious forward guidance. Equity outflows last week were huge.

Yet the DOW is over 13k, again.

There is one logical reasons for this (if you negate the outflows) and that is the smart money  realizes that rates will be low not just through 2013 or 2014, but until 2015 - however, the outflow discounts this theory which I believe will happen eventually. When people realize that rates will stay low for 2-3 years, they will need to reevaluate equities causing a rally.

Back to the lemmings running for the cliff: what is the catalyst for the rally? Europe? They have repeatedly said they will fix the problems and have done nothing. What are they proposing? Using more debt to solve the problem when massive austerity is needed.

Stay small. Stay nimble. Explore other vehicles to invest in, something that you have more control over.

[shkrelitony]

Shorting Apple Stock, Shorting the Dow

Dow 13,000 and Apple $550 all of this means a correction to me and when there is a correction there are two opportunities to make money.  The first is on the way down, shorting the stock or the market, and the second is on the rebound after panic and chaos has corrected the market.  There are a multitude of factors that could come into play that could force a correction.  Right now the rising price of oil, tension around the globe, or maybe another sector coming undone (remember the financial collapse of 2008).  Regardless of how it comes into play the key here is to take advantage of the opportunity.  Apple has a lot of cash on hand and they are very profitable but that doesn't mean that the price wont go down.   Going "short" on Apple now with a September date could net someone some serious cash, but the better bet may be going short on the Dow, then after the market does correct itself, I'm thinking 25%, you have fresh money to buy low and then sell high in the future, because if the economy is rebounding then the market will go back up after the upcoming correction. The key is to avoid the emotion that many people put into the market, when the market is down is the time to buy and when the market is high, let's say Dow 13,000, that is the time to sell.  So get out of the market and have cash on the sidelines for the correction when it comes.

[shkrelitony]

Dow 13,000, Time To Act

The Dow is nearly at 13,000 and most investor seem calm with their money but isn't the stock market about buying low and selling high.  This is the time to move money from stocks into a money market or a cash position.  When the market is good we sit still, when the market is low we're too scared to buy anything.  The market will correct itself and it doesn't need a reason it will just do it, then the so called experts will play Nostradamus and tell us what happened after the fact and after everyone has lost money.  Let's get with it and move at least 75% of your account into a money market position or cash and when the market corrects put your money to work into a large cap growth or large cap value fund.  Remember, buy low and sell high, it's time to sell.