Monday, January 21, 2008

Revisiting The Cover Story Indicator

Time to revisit the Cover Story Indicator from June 2007 when one of the leading German magazine had its cover story how to get rich with stocks.

Höchste Zeit sich mal dem sog. Cover Story Indicator aus dem letzten Juni zuzuwenden als der Focus vollkommen untypisch plötzlich auf den Aktienzug aufgesprungen ist.

Looking at the DAX chart it seems the indicator has once again worked. Nice timing
Wenn man sich den DAX Chart seitdem ansieht muß man den Redakteuren für Ihr großartiges Timing gratulieren......

With stories like Stock Drop Pulls 38 Indexes Into Bear Market; Banks Lead Plunge i think the next related stock cover will look less rosy... I´ll keep you updated and maybe at the time they will once again work as a good indicator.... But i have the feeling that this point isn´t just around the corner....
Nachdem Schlagzeilen wie diese Stock Drop Pulls 38 Indexes Into Bear Market; Banks Lead Plunge Wirklichkeit sind dürfte das nächste Börsenbezogene Cover wohl gänzlich anders ausfallen. Evtl. markiert ja auch dieses den Wendepunkt . Diesesmal dann zum Besseren.... Befürchte bloß das dies noch einige Zeit auf sich warten lassen dürfte.
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10 Comments:

Anonymous eh said...

J-M,

Took a look at CNBC in Europe today -- first time in a long time. Already some talk of bargain hunting. A good deal of realism as well, however. Overall still not worth paying close attention to every morning.

Looking forward to the US open...

11:51 PM  
Blogger jmf said...

Moin Eh,

so much for the Nasdag trade... It made it just a few hours until the SL has worked....

Today i will watch the CBC opening in the us and i´ll be closely wacthing the desperate attempts from Joe Kernen & Co to spin something positive....

12:03 AM  
Anonymous eh said...

J-M

so much for the Nasdag trade... It made it just a few hours until the SL has worked....

Ja, mal abwarten...

Although I would not be surprised to see the panic abate today, and some upside to happen tomorrow. But now is a time to be very, very careful, and remember that 1) capital preservation is a good thing, and 2) taking a profit is never a bad thing to do.

I am not as short as I would like to be right now, partly because I followed my intent to trade more this year, which came out of the fact that I'd watched profits build up and then disappear several times late in 2007. But what positions I do have are short positions -- so in that sense I am 100% short plus cash.

12:33 AM  
Blogger jmf said...

Moin Eh,

when taking my gold position into account i´m net long now.

On top of this i bought the solar heavy tecdax at the open. Also with a tight sl at 650

I think the almsot
40 percent
slump is maybe a little bit overdone or at least good for a bounce

We´ll see if this will stay longer in the books than a few hours ....

1:25 AM  
Blogger jmf said...

One more comment on my NOK tade against the €....

It seems the NOK is also very vulnerable to the carry trade.... :-(

So far i´m sticking to it but the move during the latest slump has made me wonder if this was is still a good bet...

2:09 AM  
Anonymous eh said...

J-M,

I will be interested in a few long positions as well -- like I said IMO the panic selling will end today (at the US close). But I will do this very carefully. Today I will probably just watch, however. And in the near term only trade.

The thing about TecDax and other indexes like it is this: they are composed of stocks that, on average, you have to pay a premium for. This means you are paying for growth. And I do not see how wealth destruction via a stock market 'correction', falling confidence, and (very likely) a recession are going to help with growth.

But the markets are full of surprises. Buyers will emerge. We will see...

BTW, US homebuilders, financials, and real estate are the only shorts I have. IMO these are very safe shorts right now. I went short the HBs again at the end of December after several -- e.g. RYL -- had risen well off their 52 week lows (for no good reason, I might add). IMO there is still a lot of pain (and downside) to come there. But the risks of shorting a beaten down sector which is already heavily shorted are not to be overlooked.

2:11 AM  
Anonymous Anonymous said...

At this moment the FTSE is green.

2:20 AM  
Blogger jmf said...

Moin,

i´m pleased how gold is performing in this envirement. During the last "coorection" during the china 10% intraday crahs gold sold of from $ 725 to $ 570 within a few weeks underperforming even equities.

It looks the investor base has changed significantly.

FTSE in the green? WOW!

Before the bell lots of bank earnings and the Bank Of Canada....

Lots of potential for more trouble....

2:37 AM  
Anonymous Pancho said...

http://www.youtube.com/watch?v=u591yUC_9PE

11:35 AM  
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9:29 PM  

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