Wednesday, December 10, 2008

Short-term vs. Long-term

Today's column was about a rally within an overall decline. The two time frames - long and short- are not in agreement so right away pundits tell us that following one violates the rules of the other. It makes sense if all we do is one time frame. After all, long-term investors should not be touching a bear market, no matter what is happening.

But who is a pure long-term investor? I personally have 401K money that I rarely touch (I was heavy into cash this year, thank you, but not all cash) and I have some trading money. While I cannot trade a lot because I have to remain unemotional and objective I do like to keep some skin in the game so I stay current on market nuances.

Anyway, I am very willing to get in there and buy some stuff now, knowing that I'll be selling it before spring comes back to NY. And that is why I can be bullish when I am on record as saying there will be no true bull market for many months to come.

I'm bullish and flat. Some might say the flat counts as bearish since it is a trading range that caps off the bear market. Semantics. The point is that I have a short-term and a long-term opinion.

To read the comments in various websites following my Dow 10,000 call you would think I am evil incarnate and lobotomized at the same time. Yes, I know the economy is stinko. Yes, I know there will be more bailouts.

But guess what? The market moves to extremes in BOTH directions and the current rally is working off the extreme decline. I fully expect to be able to buy at today's prices or even lower in a few months.

C'mon, Dow! Daddy needs to buy some holiday presents.

4 comments:

Kiyoshi said...

Hmmmm,

I am expecting a rally to 10 - 10.5k too however I find it odd that your column received Bronx cheers.

Were they from pros or amateurs I wonder?

paulocuana said...

I was surprised to see Kimberly-Clark and Campbell's Soup making new 52-week lows this week.
Is this further proof that this is just a bear market rally?

Quick Takes Pro said...

Kiyoshi,

One can only assume that the raspberries were from amateurs. The pros spend little time in chat rooms and comments section on websites.

The can sell their positions to us :-)

Quick Takes Pro said...

Paul,

The XLY consumer staples ETF is nowhere near a new low. I wonder what these two companies have done wrong.

I don't look at this as proof that the rally is a bear market move. The net numbers of new lows, yes, but not any stock specific stuff.