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Good evening,
I was shocked to read this, which was an email article in the recent Hubb email newsletter called "The self directed Investor" version 3, 2009. It is titled : Buy at your peril
"Tom Scollon uses this months edition to illustrate why he is still 100% in cash and why investors should buy at their peril."
If it is true and the author is correct with his predictions then I shudder to think what will happen.
When I work out how to add the link from Hubb.com I will add it.
Have a read and please let me know if you agree with him or disagree???????????? It is a very interesting and thought provoking read.
Empowering Self-Directed Investors
MAY 2009
Tom Scollon
Buy at your peril
‘Buy at your peril’ was the headline in my recent SharesBulletin market commentary. Now many suggested this sounded a bit drastic and thought I should take a look at the recent run up as evidence that the market has turned.
Well thank you for the feedback – I do like to be kept me on my toes.
Can I also say that I am studying the markets every single day without fail, and I happened to get a ‘glimpse’ of the recent market action that you were referring to. Now, I have seen similar runs to this several times before, and my experience and importantly the technical’s tell me that this is not the start of something prolonged.
Take a look at this daily chart from ProfitSource on the All Ords from 2007 to present:
http://www.hubb.com/images/charts/2009/MAY/chart1_APR3009_lrg.gif
I have highlighted several rallies which occurred over this time. The first two as you can see sucked many in, but left them badly burnt by the market action that followed. The last one is the current run - I believe we will see something similar to what we saw in the years prior.
The weekly chart suggests that is the likely scenario:
click chart for more detail http://www.hubb.com/images/charts/2009/MAY/chart2_APR3009_lrg.gif
Can we be 100% sure? Well of course not, but nor do I really want to be. Remember my goal and the goal of SharesBulletin is to find the long term moves with little risk, not to find potential moves and trade them in the hope that they will eventuate. The sentiment I am getting is that people are hoping that this is a genuine move but whether they actually believe it is another story.
So what about the U.S? For the moment I am going to focus on the S&P rather than the DOW as it is more representative of the U.S market:
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart3_APR3009_lrg.gif
Elliott Wave indicates we are somewhere near the completion of a wave four relief rally. That is, we may see some range trading but I believe we will eventually see new lows form.
Sigh.
To commodities, where Copper still looks strong in the very short term, however it could very well succumb in the months ahead, even to down below $1.50:
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart4_APR3009_sml.gif
Likewise oil could head higher short to medium term, but could also retreat to below $40.
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart5_APR3009_lrg.gif
My inclination is that we will see both drop some time mid this year.
Sigh.
Yes yes I understand - you want to be in the market making money. So do I, but I am delivering you the realities of the situation and although it is not great reading, it is essential reading. If this is a genuine market recovery I congratulate those who picked the bottom. But I am not convinced and if the market was to fall as I am predicting, then I definitely do not want to be a part of that.
So are there any glimmers of hope? Well, despite the outlook across markets world wide, there are numerous stocks which I am looking at as potential buys. What I am awaiting for though, is a pullback and I will monitor these on a daily basis using ProfitSource to identify suitable entry times.
But until that pullback occurs, buy at your peril.
Enjoy the ride
Tom Scollon
I was shocked to read this, which was an email article in the recent Hubb email newsletter called "The self directed Investor" version 3, 2009. It is titled : Buy at your peril
"Tom Scollon uses this months edition to illustrate why he is still 100% in cash and why investors should buy at their peril."
If it is true and the author is correct with his predictions then I shudder to think what will happen.
When I work out how to add the link from Hubb.com I will add it.
Have a read and please let me know if you agree with him or disagree???????????? It is a very interesting and thought provoking read.
Empowering Self-Directed Investors
MAY 2009
Tom Scollon
Buy at your peril
‘Buy at your peril’ was the headline in my recent SharesBulletin market commentary. Now many suggested this sounded a bit drastic and thought I should take a look at the recent run up as evidence that the market has turned.
Well thank you for the feedback – I do like to be kept me on my toes.
Can I also say that I am studying the markets every single day without fail, and I happened to get a ‘glimpse’ of the recent market action that you were referring to. Now, I have seen similar runs to this several times before, and my experience and importantly the technical’s tell me that this is not the start of something prolonged.
Take a look at this daily chart from ProfitSource on the All Ords from 2007 to present:
http://www.hubb.com/images/charts/2009/MAY/chart1_APR3009_lrg.gif
I have highlighted several rallies which occurred over this time. The first two as you can see sucked many in, but left them badly burnt by the market action that followed. The last one is the current run - I believe we will see something similar to what we saw in the years prior.
The weekly chart suggests that is the likely scenario:
click chart for more detail http://www.hubb.com/images/charts/2009/MAY/chart2_APR3009_lrg.gif
Can we be 100% sure? Well of course not, but nor do I really want to be. Remember my goal and the goal of SharesBulletin is to find the long term moves with little risk, not to find potential moves and trade them in the hope that they will eventuate. The sentiment I am getting is that people are hoping that this is a genuine move but whether they actually believe it is another story.
So what about the U.S? For the moment I am going to focus on the S&P rather than the DOW as it is more representative of the U.S market:
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart3_APR3009_lrg.gif
Elliott Wave indicates we are somewhere near the completion of a wave four relief rally. That is, we may see some range trading but I believe we will eventually see new lows form.
Sigh.
To commodities, where Copper still looks strong in the very short term, however it could very well succumb in the months ahead, even to down below $1.50:
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart4_APR3009_sml.gif
Likewise oil could head higher short to medium term, but could also retreat to below $40.
click chart for more detail
http://www.hubb.com/images/charts/2009/MAY/chart5_APR3009_lrg.gif
My inclination is that we will see both drop some time mid this year.
Sigh.
Yes yes I understand - you want to be in the market making money. So do I, but I am delivering you the realities of the situation and although it is not great reading, it is essential reading. If this is a genuine market recovery I congratulate those who picked the bottom. But I am not convinced and if the market was to fall as I am predicting, then I definitely do not want to be a part of that.
So are there any glimmers of hope? Well, despite the outlook across markets world wide, there are numerous stocks which I am looking at as potential buys. What I am awaiting for though, is a pullback and I will monitor these on a daily basis using ProfitSource to identify suitable entry times.
But until that pullback occurs, buy at your peril.
Enjoy the ride
Tom Scollon
