Thursday 26 April 2012

There Is Bull and Then There is Bulls**t. Edited.

It is not the market action that is surprising. It is the reaction of various pundits who dish out various sermons that is surprising. Was it surprising that SPX closed around 1400? I would have been surprised if it did not. But so many have written the obituary of the up-trend and have gone short and are now surprised that the market is going to test the highs again. 

So, the market has killed some of the early bears and it is now laying trap for the early bulls. Or for those who missed the last rally.  Among all the noise, what caught my eye today was an article, stating that Gold will reach $10000/oz! Now that is something! I was so intrigued that I did dig a bit more. This article was written by an entity that is operating out of Ireland and fishing in North America for gullible investors. They proclaim to be dealers in precious metals and offer wealth management services. Obviously they are trying to manage their own wealth not yours.

I am gold bull myself and expect the price to reach $ 2500 in the next 12-18 months but $ 10000/oz? What are they drinking?  Does it remind you of Tulip mania? But a scam star will do its best to scam and we give it to them.

Educate and inform one more person around you and let this chain start working. Only through collective knowledge about the functioning of the market, we can become better investors.

Nobody can be right in calling the market all the time. The best investment policy is to follow the dominant trend and not get whipsaw or front run. Give up some of the profits in the beginning of the trend just to make sure that it is not a head fake. I understand that the most difficult part is to wait but with proper money management, risk management and trend identification we can be successful in the long run. Good trading opportunities come only 2/3 times in a year.

Thanks for bearing with my rant. We will wait and see how the market behaves for next few days and decide our course of action. A test of the high is always in the cards but we need to see what happens thereafter. Do not chase the bus. I would humbly suggest that you do not even dream of going long here or short. Just stay put in cash. In the mean time, start the process of educating one more person. Forward this post to someone you know who might benefit and invite them to read more at

Note: This post has been edited after one reader very correctly pointed out that I should not mock anyone else.It is OK to point out scams but it is not OK to criticise others who are also doing a great job of educating retail investors / traders. I myself have been wrong in my market calls in the past and I should realize that nobody can be right all the time. My apologies and thank you for pointing out my mistakes.
I stand corrected and humbled. 


  1. Love ur post. Like the title. Yeah, people do not value free advice, may be you should start charging...

  2. I don't understand why we can't all get rich by getting our free investment advice from a website where the writers/commenters are all arming up, stockpiling ammunition and canned goods and gold while making plans to avoid the NWO FEMA death camps Obama is building for us all.

    [Sarcasm: off]

    Zerohedge is full of nuts. It deserves to be mocked.

  3. I always liked your postings and thougts about market. But one thing i am not able to understand why trying to be speculative and stay in cash when market is totally giving an opportunity to try the long side with clear break on the trend. Today, specially market showing the signs of strengths and increasing momentum when it broke the 1390 area. We had a clear buy on short term 60 min. time frame yesterday while daily trend was never given a sell signal in the first place.

    In my opinion, there are obviously more bullish setups than bearish setups in the market. Why shouldnt we simply follow the trend with a plan (entry/exits). Of course we always have shock waves in the market (like Spain downgrade after close) , but that risk is always there in the equity markets and that can be managed with a stop loss

    My questions -
    1) What are the reasons to be in CASH now ? If the markets corrects a little to support zones or move up more with confirming trend, do you not advise to go long ?

    2) Of course CASH is an investment itself, and we always should protect our capital, but without investing its stays same value. When others easily following the trend and having a profit, shouldn't we try NOT being speculative ?

    3) I knew this blog is NOT about trading advise. But, if you are suggesting market is not yet ready for shorting, there is more upside left which we dont know whether it will fail around 1420 or 1440 or even more. I guess either charts give us some hints or market only decides that. I am more concerned being sidelines during times when we should start making some investments rather wait until times where it started turning in opposite direction. What if market decides make higher highs ? Is it not a possibility at all?

    4) No one thought that market would reverse at 1360 area on last Mon, not one blog that i usually follow. But people who are smart quickly covered the shorts when they saw the strength on upside and started longs to make some money. Shouldnt we simply trade what charts tell us rather being speculative?

    Just wanted to know your feedback, I guess you obviously know more than i do, and wanted to be more clear why being nuetral ?

    1. Hi Prasad,
      There are few things I am trying to say:
      1. Preservation of Capital is most important.
      2.My time frames are different.
      3. I want to trade as little as possible. I am looking at weeks if not months. I am not a day trader or scalper. Trading is not my full time job, Investment is.
      4. I did point out on on April 23, that we have tested the lows now we will test the highs. I suppose that makes me an exception. Only thing different is, I have been advising to get out of market, sell in strength and not to short. Because, most folks like me, who have a regular job and are interested in investing, do not have the time to sit in front of the computer whole day and adjust their position based on hourly chart.
      5.I have mentioned earlier that my upside target is SPX 1450 and time frame was April 20, whichever came 1st. I got out on April 20.
      6. I also mentioned that it is quite possible that we will see 1450 before we roll over.
      7. Those who bought at 1080, need people to sell them to. Those who are buying at this level are the targets.
      8. If we decide our investment decisions based on technical analysis and chart patterns,, we are destined for slaughter house. TA is a tool to help us decide entry and exit points, not an end itself.
      9.The risk and reward at this point do not justify to stay invested.
      I suppose that is all. Again, question is whether you are a trader or investor with a longer time frame. If you are the later and do not want to risk your capital, you should know when to quit the race. It is not possible to time the top or bottom.

    2. Thanks for the response. I am not a trader either, only invest in long side as i am not that experienced to trade both sides (Only in this from 2009) and go with small trades only with some midcap/growth stocks.

      I am sorry i didnt fully read your post on 23rd, you may have advised about the test.

  4. "They have killed the early bears, now they will honey trap the early bulls."
    BB, who exactly do you mean by "them"? And what events in the past proved you that such forces indeed exist? ;-) thanks!

    1. Hi Ringo,
      You are not the only one not to believe in market manipulation.90% of the world's stock and derivative trading is done by 50 big investment banksters. They along with CBS now try to dictate the price.
      The 3rd mandate of the Fed ( unofficial of course) is to keep the stock prices inflated so that there is no financial meltdown again, ever. They do not want to see a repeat of 2008/9.
      The proof is in the action. Not any paper trail. If you can anticipate,you can benefit by following.