Not Yet A Believer In Numbers? Then How Did I Call The Top Of The SP The Same Day It Happened….
May 25, 2008 12:04 AM
The call is not on this site, so I cannot prove it as it was before the site was started. But the night after the SP made it’s high, I sent an email to probably 20 or so co-workers and friends and warned that “the reaction and rejection of the high was the most forceful that I have seen since the Bubble. I believe that this is ominous and could have lasting effects and this could be a long term top. Do not be long on anything until further notice” or something very similar to that. Did i email many of these on other market falls? No. This appeared to me to be far different.
Why did I take the time and trouble to email everyone that night? Because I saw a very strong rejection in price that was reflected in the numbers. I looked back 10 plus years in charts and believed it was the strongest rejection since the Bubble and did not have any matches other than that and it appeared to be a big problem. While news “could” have pushed the markets higher, it was obvious to me that we had possibly reached an area that people were more than willing to sell.
Coincidently, I also called the top on APPL and told a friend of mine who trades AAPL to “short AAPL here at $200″. What did he do? He bought 2,000 shares against my STRONG advice after it fell to $190. It plunged 40% and finally has recovered and he got out even. I need to borrow his rabbit’s foot as he was extremely fortunate.
Point being, outside of strong news to change the dynamics of supply and demand, a trained eye can see what is going on and is reflected in the charts. That will always be the case. Always.
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