If you follow the Technicals, one thing screams out, and that is that this market is severely OVERBOUGHT.
Several experts whom I have followed and respect for more than 10 years and called the last crash (and made their follows money during it) are expecting a large correction , soon, very soon.
One of my favorites is Dennis Slothower who runs Stealth Stocks is saying a large correction is imminent and asking his followers to move into cash.
Dennis is generally spot on
In November 2010, Marketwatch.com had this to say about Dennis:
“(He’s the) advisor who dodged the Crash of 2008…a particularly striking performance.”
And the fiercely independent rating service, Hulbert Financial Digest, has rated Dennis’s service as the second-best – out of 145 services tracked – in terms of risk-adjusted returns.
This is why I am against the typically IRA. If your serious about retirement using the markets, you MUST have your money with a fund that will fiercely protects your gains. It was IRA's that wiped out a lot of retirements in 2008.
If you are trading on your own, I would advise moving forward with caution at this point. Since the last correction was so recent, I see this time being a lot sharper. That is because all those traders that held in 08 and got burned, are NOT going to let that happen again.
Now the good news:
There might actually be some great opportunities to short sell some majorly overbought stocks. I'll be looking to pick up some cheap shares of companies such as GOOG (cheap being $500), which could see a drop of 20% or more if its a sharp enough correction. Other companies like Amazon and Salesforce that I am following will definitely take a bath as well.
On the flipside look to short the grossly overbought stocks.....
I welcome any opinions :-)
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