[Chris Scoreboard Johnston]

Just as so I cannot be accused of ducking out when the market is dropping, I thought I would post quickly that my timing system still says to be long, so I am staying pat. My open profit on the April stock purchase has dropped down to 6% from about 20%. Boeing is one fifth of it, and it has continued to rise, effectively saving the boat so far. Cat is another 20% of it, and although getting pounded, is still more than 10% above my entry price.

I will admit that I did not see a drop of this magnitude occuring on very little if any fundamental warning of it. Yes there are alot of opinions, but the fundamentals I watch are still heavily on the long side, so I guess I just hold on and hope for the best. My mentor is actually very bullish right now, which even I have to admit, is hard to believe looking at the chart.

For the record, my futures long is about to be stopped out for a loss, but I only have 2 contracts instead of the usual 30 due to it being a low % trade within my parameters going in. When volatility increases this much, I reduce my size way down to lower risk. This is no time to be a hero, it is time to be careful. It is probably a buy about right here, but no add ons for me, I will just ride the longer term trend, until my system says to get out, win or lose.

It would also be a good time for all those that have been short for so long, and getting killed, to cover that position even if you are still a bit upside down. A big bounce at the very least is coming.

Go back in the archives to where I posted about the years ending in 7 summer sharp correction that was ridiculed by that punk that does not seem to be around anymore. It looks like I was off by about one week on that call, a year in advance of it.

[Chris Scoreboard Johnston]

Just as so I cannot be accused of ducking out when the market is dropping, I thought I would post quickly that my timing system still says to be long, so I am staying pat. My open profit on the April stock purchase has dropped down to 6% from about 20%. Boeing is one fifth of it, and it has continued to rise, effectively saving the boat so far. Cat is another 20% of it, and although getting pounded, is still more than 10% above my entry price.

I will admit that I did not see a drop of this magnitude occuring on very little if any fundamental warning of it. Yes there are alot of opinions, but the fundamentals I watch are still heavily on the long side, so I guess I just hold on and hope for the best. My mentor is actually very bullish right now, which even I have to admit, is hard to believe looking at the chart.

For the record, my futures long is about to be stopped out for a loss, but I only have 2 contracts instead of the usual 30 due to it being a low % trade within my parameters going in. When volatility increases this much, I reduce my size way down to lower risk. This is no time to be a hero, it is time to be careful. It is probably a buy about right here, but no add ons for me, I will just ride the longer term trend, until my system says to get out, win or lose.

It would also be a good time for all those that have been short for so long, and getting killed, to cover that position even if you are still a bit upside down. A big bounce at the very least is coming.

Go back in the archives to where I posted about the years ending in 7 summer sharp correction that was ridiculed by that punk that does not seem to be around anymore. It looks like I was off by about one week on that call, a year in advance of it.

[Chris Scoreboard Johnston]

Where do you stand on the position as a whole? Are we to believe that you waited every day for 12 months to short until the day before yesterday and got the exact high? If not, you are probably at best even on your puts if not still upside down due to time erosion as well as price. Also, % gains on options are less meaningful than the gross dollars made. I know people that talk about 50% returns etc, but they only have a few thousand in, so 50% is not an appreciable amount of gross dollars even though it sounds great at cocktail parties. If we get a worldwide financial crisis, you bears will ultimately be right. I do not root or gloat, I have been doing this too long to get too carried away either way.

I am one of the bulls, and did get my ass kicked the last few days. Today will be very interesting, the rally in bonds is what I think will stablize things shortly. Also, the COT report out today I doubt will show a major shift to the short side, but if it does, I will re-evaluate my positions. We could get a very sharp rally in the near term due to these two things. Most of the things present at prior major highs, are not present here, but anything can happen.

I am buying the open today in the S&P futures, which as I type this is down about 10 points from yesterdays close in the pre-market. I also bought some futures yesterday, but was stopped out on that trade. The gloom and doomers are going to get another pleasing open, if we stay here for the next hour.

[Chris Scoreboard Johnston]

Where do you stand on the position as a whole? Are we to believe that you waited every day for 12 months to short until the day before yesterday and got the exact high? If not, you are probably at best even on your puts if not still upside down due to time erosion as well as price. Also, % gains on options are less meaningful than the gross dollars made. I know people that talk about 50% returns etc, but they only have a few thousand in, so 50% is not an appreciable amount of gross dollars even though it sounds great at cocktail parties. If we get a worldwide financial crisis, you bears will ultimately be right. I do not root or gloat, I have been doing this too long to get too carried away either way.

I am one of the bulls, and did get my ass kicked the last few days. Today will be very interesting, the rally in bonds is what I think will stablize things shortly. Also, the COT report out today I doubt will show a major shift to the short side, but if it does, I will re-evaluate my positions. We could get a very sharp rally in the near term due to these two things. Most of the things present at prior major highs, are not present here, but anything can happen.

I am buying the open today in the S&P futures, which as I type this is down about 10 points from yesterdays close in the pre-market. I also bought some futures yesterday, but was stopped out on that trade. The gloom and doomers are going to get another pleasing open, if we stay here for the next hour.

[Chris Scoreboard Johnston]

Nor – La

It might be that the upward stock trend will hold. My big picture system is nowhere near a sell signal yet as I thought it would be by August 1st. The commercials are very heavily long at this point, which is very bullish. Also, the bond market rally if it continues, is supportive of stock prices. Maybe the PPT will hold stocks up for awhile until the RE mess calms down a bit.

Also, although an intangible, there seems to be alot of negative news out there, which is typically not what surfaces at market tops.

Boeing, which is one of my core stocks I bought in April, just made new all time highs today, so things are still ok for alot of the big caps. I like the boring steady companies, not the high fliers.

[Chris Scoreboard Johnston]

Nor – La

It might be that the upward stock trend will hold. My big picture system is nowhere near a sell signal yet as I thought it would be by August 1st. The commercials are very heavily long at this point, which is very bullish. Also, the bond market rally if it continues, is supportive of stock prices. Maybe the PPT will hold stocks up for awhile until the RE mess calms down a bit.

Also, although an intangible, there seems to be alot of negative news out there, which is typically not what surfaces at market tops.

Boeing, which is one of my core stocks I bought in April, just made new all time highs today, so things are still ok for alot of the big caps. I like the boring steady companies, not the high fliers.

[Chris Scoreboard Johnston]

I think what we are seeing is that volume has very little to do with price. I would have thought with this large of a volume drop, prices would have come down much more. This is part of the reason why I have shifted my view to a more moderate decline opinion. Volume also does not correlate to stock prices, even though many people mistakenly write about that relationship.

It will be interesting to see what the common correlations are between this decline and the 90’s decline, when it is all said and done, because there are already significant differences, especially in the lack of median movement.

I do not think we are going to see a crash, just a slow downward movement for a couple more years. We could not ask for much more than what we have had in terms of negative news for a drop, yet the bottom has not fallen out.

As it is with trading, you have to watch how prices react to news, and forget about your opinion about what should happen. The facts are that all of this bad news has not moved prices down much, so that is what matters, not what should happen. Maybe that is what should happen. An upwardly biased asset like a house should go down small amounts on bad news, because it is not an even playing field. Lack of downward price movement on negative news in assets is bullish bigger picture.

[Chris Scoreboard Johnston]

I think what we are seeing is that volume has very little to do with price. I would have thought with this large of a volume drop, prices would have come down much more. This is part of the reason why I have shifted my view to a more moderate decline opinion. Volume also does not correlate to stock prices, even though many people mistakenly write about that relationship.

It will be interesting to see what the common correlations are between this decline and the 90’s decline, when it is all said and done, because there are already significant differences, especially in the lack of median movement.

I do not think we are going to see a crash, just a slow downward movement for a couple more years. We could not ask for much more than what we have had in terms of negative news for a drop, yet the bottom has not fallen out.

As it is with trading, you have to watch how prices react to news, and forget about your opinion about what should happen. The facts are that all of this bad news has not moved prices down much, so that is what matters, not what should happen. Maybe that is what should happen. An upwardly biased asset like a house should go down small amounts on bad news, because it is not an even playing field. Lack of downward price movement on negative news in assets is bullish bigger picture.

[Chris Scoreboard Johnston]

Adam,

Sorry I could not comment on this yesterday, for some reason I was blocked from this thread. As I think predicted in the thread at the beginning of the year about going on the record with predictions, I think Bond prices will rally in the 2nd half of the year ( rates will drop ). Even if I did not do it there, I wrote about it in my newsletter ( no I am not hawking the newsletter, just stating that I am officially on the record on this subject in it ), and also told Adam during my home purchase process, that I thought rates would rise into June, then decline. This is one of the most consistent seasonal patterns in the markets, rate rise through June, then decline through the end of the year. It is tracking almost to the week so far this year, so I expect it to continue.

Patient Renter, to answer your question, I mostly trade the futures markets, Bonds and S&P. I do trade stocks as well, but normally hold them for 6 months or so, whereas the futures I trade much more actively. I have commented alot on stocks this year, due to the strong trend in the markets that I saw people fighting, and it was my attempt to try and dissuade people from doing that. I have officially dropped that campaign, as it is hopeless. I have learned that lesson the hard way in my career, and I thought I might be able to spare some people the heartache, but it did not work.

[Chris Scoreboard Johnston]

Adam,

Sorry I could not comment on this yesterday, for some reason I was blocked from this thread. As I think predicted in the thread at the beginning of the year about going on the record with predictions, I think Bond prices will rally in the 2nd half of the year ( rates will drop ). Even if I did not do it there, I wrote about it in my newsletter ( no I am not hawking the newsletter, just stating that I am officially on the record on this subject in it ), and also told Adam during my home purchase process, that I thought rates would rise into June, then decline. This is one of the most consistent seasonal patterns in the markets, rate rise through June, then decline through the end of the year. It is tracking almost to the week so far this year, so I expect it to continue.

Patient Renter, to answer your question, I mostly trade the futures markets, Bonds and S&P. I do trade stocks as well, but normally hold them for 6 months or so, whereas the futures I trade much more actively. I have commented alot on stocks this year, due to the strong trend in the markets that I saw people fighting, and it was my attempt to try and dissuade people from doing that. I have officially dropped that campaign, as it is hopeless. I have learned that lesson the hard way in my career, and I thought I might be able to spare some people the heartache, but it did not work.

[Chris Scoreboard Johnston]

I love it, someone who cannot even spell anothers name correctly, calling him an idiot!

[Chris Scoreboard Johnston]

I love it, someone who cannot even spell anothers name correctly, calling him an idiot!

[Chris Scoreboard Johnston]

Why wasn’t the market correct when it went to 5000? If you were long from 4000 or 4500 you made a good amount of money. I would argue that the market is always correct, if you were not flat or short when the drop started you were just out of sync with the market. I went flat in January of 2000 in every account that I have and can prove it.

My basic point of all of this is not to be a know it all becuase I have taken my fair share of drubbings over the years, believe me. However, the point is that too many people equate economic things that they think determine stock direction with stock prices, and most of those alleged relationships are invalid.

There is very little relationship between the dollar and S&P prices as an example. As a result, analyzing what the dollar will do as a reason to invest or not to invest in stocks is invalid. You can argue that there should be, but in all the studies I have done, I have found no correlation whatsoever, basically a coin flip.

The skit with inflated adjusted dollars strikes me as just people trying to sound smart. There is no way to perfectly hedge dollar risk in terms of currency valuation, and when I buy things, I do it with todays dollars, not today’s inflation adjusted dollars. Am I better of with the 20% gain in the stocks I bought at the beginning of April or if I had been a wise guy and over analyzed and discounted the absolute Dow value rise with the declining dollar, and parked the money in a foreign currency since April?

Gold was at 685.1 when I bought my stocks and it is at 678.1 as of todays close. By my math the small decline is less than the 20% average gain I have in my stocks during the same period.

I will drop this subject in this blog at this point, because of the different view on things that I have versus everyone else. I hope my manner in attempting to educate people did not come across poorly. Sometimes posts have tones that are not intended when they are written.

[Chris Scoreboard Johnston]

Why wasn’t the market correct when it went to 5000? If you were long from 4000 or 4500 you made a good amount of money. I would argue that the market is always correct, if you were not flat or short when the drop started you were just out of sync with the market. I went flat in January of 2000 in every account that I have and can prove it.

My basic point of all of this is not to be a know it all becuase I have taken my fair share of drubbings over the years, believe me. However, the point is that too many people equate economic things that they think determine stock direction with stock prices, and most of those alleged relationships are invalid.

There is very little relationship between the dollar and S&P prices as an example. As a result, analyzing what the dollar will do as a reason to invest or not to invest in stocks is invalid. You can argue that there should be, but in all the studies I have done, I have found no correlation whatsoever, basically a coin flip.

The skit with inflated adjusted dollars strikes me as just people trying to sound smart. There is no way to perfectly hedge dollar risk in terms of currency valuation, and when I buy things, I do it with todays dollars, not today’s inflation adjusted dollars. Am I better of with the 20% gain in the stocks I bought at the beginning of April or if I had been a wise guy and over analyzed and discounted the absolute Dow value rise with the declining dollar, and parked the money in a foreign currency since April?

Gold was at 685.1 when I bought my stocks and it is at 678.1 as of todays close. By my math the small decline is less than the 20% average gain I have in my stocks during the same period.

I will drop this subject in this blog at this point, because of the different view on things that I have versus everyone else. I hope my manner in attempting to educate people did not come across poorly. Sometimes posts have tones that are not intended when they are written.

[Chris Scoreboard Johnston]

I wonder what the reason tommorrow will be as to why the stock market is wrong to be climbing and all the experts that are missing the run are right about the end of the world.

It is tough to bet on these monster crashes, because in reality only one has ever happened ( 1929 ) so you are really betting against history. A correction is inevitable, and it could be sharp, but a crash is not going to happen.

My favorite post on this was the one where it said that the market was actually wrong, I do not recall who put that one up. Be clear on one thing, the market is always right, it is an individuals job to get in sync with it, be it up or down. If you are bearish you have simply been wrong up to this point. There are always illegal finacing or ridiculously leveraged financing deals going on with Wall Street. These funds are high risk/high reward, some of them are always going to go POOF!

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