The Bottom?

Every day I hear someone on CNBC proclaim that "this is the bottom" and you should get in there and buy all those "bargains". "The valuations of the DOW stocks are a steal."

The low of DOW 8,000 immediately after September 11 was "the low" and the market did rally to about 10,700. That's 2,700 points. A smart trader could have made a fortune in six months. Oops! Then there was a Brody to DOW 7500. That's more than 3,000 points. That, for sure, is "the bottom". I heard them say so on TV and radio. It can't go any lower. Can it?

There has been a 1,500 point rally, but there now seems to be another one of those 'Oops' taking place. What is going on anyway?

The great majority of the media are too young to remember the last bear market of 1973-74 when the S&P lost 43% and the Value Line index was down 75%. In the last 2 years this bear has seen the S&P500 index lose 50% and there does not seem to be any so-called bottom in sight. Yet investors are encouraged to buy "for the long haul". Even the staunchest Buy and Holders are finding out that they need to have loss limit orders in - a long time ago. There is such a thing as market timing.

What has been happening is the market is making a correction of the excesses of the 18-year bull market from 1982 to 2000. If it took 18 years to reach the top then how long will it take to get to the bottom? I wish I knew. The predictions run from today to 15 years hence. Japan's bear just celebrated (?) it's 19-year low. From 1920 to 1980 there were 3 bull markets that lasted about 16 years and each was followed by bear markets that hung on for about an equal length of time.

As a technical analyst I have not seen anything that makes me believe we are near "the bottom".

And when that happens will the market take off on another bull run? Not very likely as the little guy will be broke and so shook up from his losses he will vow to "never play the market again". That very thing has taken place at the bottom of every major bear market. In 1932 it was more than a generation before investor confidence returned. Am I implying this could be another 1929-32? Anything is possible with the stock market. No broker will ever tell you that cash is a position. Cash at zero percent interest is better than losing 20% each year.

They might be having a big garage sale on Wall Street today, but I prefer to keep my money in my pocket - or maybe under the mattress.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

---

What the Hell is a Stock option?

A 'stock option' is a contract between two parties giving... Read More

Fools Gold

The stock market has been in an up trend for... Read More

Peer Groups

Whenever I see mutual fund comparisons in the trade publications... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

The Secret Method to Selecting a Winning Trading System

Every successful trader has a winning system. There are of... Read More

The Stock Market is a Roller Coaster: Prepare for the Ups and Downs

IT'S REMINISCENT OF THE OLD children's tale about an old... Read More

Hill of Hope

Just about now everyone is confused as to which way... Read More

The Big Bad Bear

The big bad bear is stirring again. So far he... Read More

Hedge Funds

You read and hear a lot about hedge funds. Unfortunately,... Read More

Mutual Fund Commissions

You have heard about a particular mutual fund from a... Read More

Successful Trading ? Establish Your Risk Level

Before you embark upon a journey of trading stocks or... Read More

What is Involved in Peak Performance Trading?

There is so much involved in developing peak performance, that... Read More

Stock and Fund Dividends

When is a dividend not a dividend?The latest thing "conservative"... Read More

Adding Funds

Someday you may want to retire and continue to live... Read More

How to Make Big Money Safely in Stock Market

(1) Stock Market is Tough Place to Make Any Money... Read More

Attitude Is [Almost] Everything

I often play a little game with myself when I... Read More

Analyst Reports

When you become interested in a stock or mutual fund... Read More

True Investment Road Maps

If you don't know where you are going any road... Read More

Investment Clubs

Because you don't feel too sure about which stock or... Read More

Hot Stock Investing ... How to Pick Hot Stocks with Momentum Stock Trading

Profitable day traders recognize that momentum trading is among the... Read More

Mutual Funds: The Modern Den of Thieves!

Mutual funds were created with the idea that one person... Read More

A Stock Market Investment Plan that Never Lets You Down

The bulls and bears of the stock market are both... Read More

How to Short Stocks? How to Make Money when Your Stocks Go Down by Shorting

The stock market can present you with a lot of... Read More

How To Beat The Mutual Fund Companies At Their Own Game

You'd have had to be living on a desert island... Read More

KISS Formula

There are formulas for just about everything, but it has... Read More

Duct Tape

Did you run out to buy that duct tape yet?... Read More

A Penny for Your Stocks

According to Investopedia Inc. the penny stock market has seen... Read More

Good News?

As the man said, "I've got some good news and... Read More

Dont Buy Worldcom! A Guide to Wise Bottom Fishing

Over the past few months, several investment professionals have brought... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

No Load Mutual Funds: Investment Hype vs. Investment Help

With the internet such a huge part of our daily... Read More

Lifestyle Funds Provide Greater Security?

With the stock market stubbornly refusing to settle down and... Read More

How to Find Value in No Load Mutual Fund Investing

What are you thinking when it comes to your no... Read More