Bankruptcy

More Reasons To Sell Stocks/Short the Markets

By mcbride

The folks at the Elliott Wave have been saying that we have reached a top of the market for some time.  Well, they have said the actual top was right before the big fall in 2008 and that what we have now is an interim retracing back up to an interim high.  However one looks at it, the markets, all of them except the dollar, are about to plunge, again according to their theories.  One of the bases on which they base this prognostication is the nearly uniform upbeat chorus of “buy stocks.”  When popular opinion is so unified and positive, it is time for a fall, according to their theory.  Elliottwave’s examples include:  the 13 largest banks in the world were polled by Bloomberg and all 13 are bullish; national newspapers, like USA Today,  have uniformly said the same thing: buy stocks; Barron’s reviewed the 10 top institutional investment strategists and all 10 were bullish; individual investors (AAII members) are 63.28% bullish; likewise, a USA Today poll has individuals being so high on the markets right now that only 1% thinks the markets will fall 10% in the coming year. 

“The unanimous, come hell or high water bullishness of analysts is highly reminiscent of the famous headline, “Not a Bear Among Them,” which graced the cover of Barron’s in January 1973.  It appeared days before the start of the biggest decline in the stock market since 1937-38.”  This quote is taken from the Elliott Wave Financial Forecast of December 31, 2010.  See more at www.elliottwave.com .  Now you know. 

Michael

Full post as published by Texas Lawyer Blog on January 05, 2011 (boomark / email).