Earlier yesterday afternoon, I posted the email appended here to my Twitter, StockTwits, Facebook and LinkedIn Connections as well as via email to my closest friends.
I'm seeing a big divergence in the risk/reward ratio for stocks and way too much pent up risk on the fundamentals that don't correlate with stock performance in the U.S. stock market.
The last time I felt this way, I told my father-in-law to get out of his 401K when the S&P was at 1,550. He got talked out of doing anything by his banker who didn't know crap about stocks. The market dropped within a few weeks to 1,270 and then bounced around and I got my father-in-law and took him down to the bank myself when the market came back to 1,350 and he told his banker to liquidate everything while I was there to explain to his banker that I knew more about trading than he did and that he wanted out so please stop trying to convince him to get into something else. That was in April of '08, by March of '09, the S&P had halved to 670 so I saved him half his retirement savings.
I can't exactly explain why but I feel even worse at the gut level about the markets right now.
We might even see a test of the post crash lows of 670 again before the market comes back.
In short, be careful and keep your stops tight would be my advice. If you are not at least an expert amateur trader I'd get out and get to safe cash investments. You can always get back in in a few weeks or months if things stabilize and the risk goes down.
Regards,
Curtis
P.S. If this type of posting is inappropriate for here, please delete it. I don't want to do anything against the rules. I didn't warn my larger groups of friends the last time and I really wish I had. So this time I wanted to make a concerted effort to reach out to my forum friends.
You can see my experience as a trader if you Google my name, Curtis Faith, on Amazon where you'll see my three books on trading and risk. My first book was an international bestseller called Way of the Turtle.
-----------------------------------------------------
Here's what I've been telling my friends today.
If any of you have a lot of money in the stock market. I'd suggest that now is a very good time to go to cash. 100% cash. If I were you I'd sell everything in my 401K etc. Sell mutual funds, etc. Individual stocks etc.
The market is ripe for a correction and it could get ugly again. My intuition tells me that it could get worse than we've seen in recent memory.
I don't generally make predictions and this isn't a prediction exactly as the price could certainly go higher. The issue is that the risk/reward for staying in is wrong. The upside is much smaller than the downside and the market has just failed to exceed the highs of April of this year.
Historically that is not a good sign.
I just thought I'd let my friends who are not traders know.
Don't put the money in corporate bonds either. Put it in U.S. guaranteed funds or Treasury Bills preferably.
Definitely Avoid Gold!!!!
And I would not wait until tomorrow. It could cost you a lot.
- Curtis
P.S. Feel free to tell your close friends as any friend of yours if a friend of mine.
I'm seeing a big divergence in the risk/reward ratio for stocks and way too much pent up risk on the fundamentals that don't correlate with stock performance in the U.S. stock market.
The last time I felt this way, I told my father-in-law to get out of his 401K when the S&P was at 1,550. He got talked out of doing anything by his banker who didn't know crap about stocks. The market dropped within a few weeks to 1,270 and then bounced around and I got my father-in-law and took him down to the bank myself when the market came back to 1,350 and he told his banker to liquidate everything while I was there to explain to his banker that I knew more about trading than he did and that he wanted out so please stop trying to convince him to get into something else. That was in April of '08, by March of '09, the S&P had halved to 670 so I saved him half his retirement savings.
I can't exactly explain why but I feel even worse at the gut level about the markets right now.
We might even see a test of the post crash lows of 670 again before the market comes back.
In short, be careful and keep your stops tight would be my advice. If you are not at least an expert amateur trader I'd get out and get to safe cash investments. You can always get back in in a few weeks or months if things stabilize and the risk goes down.
Regards,
Curtis
P.S. If this type of posting is inappropriate for here, please delete it. I don't want to do anything against the rules. I didn't warn my larger groups of friends the last time and I really wish I had. So this time I wanted to make a concerted effort to reach out to my forum friends.
You can see my experience as a trader if you Google my name, Curtis Faith, on Amazon where you'll see my three books on trading and risk. My first book was an international bestseller called Way of the Turtle.
-----------------------------------------------------
Here's what I've been telling my friends today.
If any of you have a lot of money in the stock market. I'd suggest that now is a very good time to go to cash. 100% cash. If I were you I'd sell everything in my 401K etc. Sell mutual funds, etc. Individual stocks etc.
The market is ripe for a correction and it could get ugly again. My intuition tells me that it could get worse than we've seen in recent memory.
I don't generally make predictions and this isn't a prediction exactly as the price could certainly go higher. The issue is that the risk/reward for staying in is wrong. The upside is much smaller than the downside and the market has just failed to exceed the highs of April of this year.
Historically that is not a good sign.
I just thought I'd let my friends who are not traders know.
Don't put the money in corporate bonds either. Put it in U.S. guaranteed funds or Treasury Bills preferably.
Definitely Avoid Gold!!!!
And I would not wait until tomorrow. It could cost you a lot.
- Curtis
P.S. Feel free to tell your close friends as any friend of yours if a friend of mine.