Stock market sell-off?

Question

September and October are generally bad months for stocks yet there hasn't been a sell-off this year. My technical analysis on the market indicates a sell-offs but it's just hasn't come so far. I have a lot of puts and am worried sick seeing the market go up! any ideas?

Answer 1

Technical analysis trumps fundementals everytime! We are hitting a resistance area and the market has risen quite well over the last several weeks. So for these reasons, it seems the market should go down (plus we could be economically slow) But because most know sept/oct can be bad months, now might be a good time for a contrairian play. And, one day we just might break this resistance, which I believe we may do soon, barring any major disasters. So personally, I am not comfortable with either direction right now and want to wait for a break. Should it break on the upside for two days close, I would get out of your puts. I know this answer doesn't help much with your position...sorry. But best of luck!

Answer 2

The market can be very difficult at times to predict.

What you need to understand is the flow of mutual fund money into the market.

They have the greatest influence on stock values, and they usually pour money into the market at prime times of the year.

Summers generally are slow, approaching holidays see some action, and tax time is especially a big time for putting money into the market.

Just because previous times were bad for Sept. and Oct. doesn't mean it will always be that way.

It's very possible that no real correction will take place until the Dow exceeds 12000.

Then again, it may correct soon.

Earnings are expected to be robust, and earnings period will begin in a few weeks.

My best guess is that soon after the earnings period ends, it will correct and fall, maybe as much as 1000 points on the Dow.

That would mean a leap soon to over 12000, and a pull-back to 11000 (or thereabouts).

Timing the market is so difficult.

I do have charts that show a big drop in the market the two weeks prior to Sept. 11, 2001. It amazes me that within a few months after that, the market was trending higher, and has ever since.

That shows the resiliency of the stock market in the face of potential disasters.

Capitalism has never been better.

Answer 3

If you want to increase your odds, and not reduce them, you will learn, one way or another, not to trade against the trend.

You will also learn that trying to "predict" the future is useless. The future is unknown and always uncertain.

You cannot call yourself a technical analyst if you go against these two rules. This is very basic stuff.

These two things combined, in essence, you are telling the market what to do. It can hold out a lot longer than you can.

Much better to know what to do as certain price points are reached or breached, like at Fibo levels or support and resistance levels.

How can you call a market top as long as the Uptrend is intact all the way back to the July low? The trend is up, not down. This trend will continue until it is broken.

Surely you didn't buy puts on historical percentages? Might as well trade on the length of women's skirts, or the Superbowl indicator, or how about because Saturn is in the realm of Ur-Anus.

So you skipped the basic stuff, and went straight for the advanced and very complex leveraging of options, trying to "get rich quick." Might as well have sold your soul to the Devil.

Answer 4

I have a great idea go to thestreet.com and pay for analysis from this site and watch your profits grow. I have used this site since 1998 and it works great. One of their commentators predicted the market sell off in March 2000. Incredible.

Answer 5

Technical analysis is without value but market still likely to take a hit.

Answer 6

I think that's pretty funny that you think you can time the market.

If it were this easy, don't you think that more than 30% of fund managers would be able to beat the index?

A fool and his money are soon parted.