Let me look at your post piece by piece and try to answer it as best I can.
"Just curious, with downtrend seemingly advocated, how does this influence my investing?"
First - you seem to have understood my message loud and clear. I am suggesting (not advocating) that the trend is down. I thought that was unambiguous.
Next - how this influences your investing is totally up to you. I don't think I have total knowledge about the future. Anything but. What I do have, I believe, is some faint glimmerings about where the market might go. How you decide to take them is up to you.
"In other words is it time to go long, or should i sit and wait and then go long? Surely you aren't advocating to be short!"
How would I know anything about you. Or your investment goals or desires. I'm not your financial advisor who might understand your particular circumstances. But - under no circumstances whatever would I consider that today you should go long. Maybe next week. Or next month. But not today. Go short? That's up to you. Reduce your holdings? That's up to you.
Do you agree or disagree with my assessment? Given all of your personal circumstances - what then should be your decision. I have no idea. Make up your own mind.
"After all it could be a greater risk to be short in the current volatile market, particularly with the XJO at around 3800."
Why would you suggest it is a greater risk in the current volatile market to be short than to be long? Do you have any other reasons for this? Usually, volatility means a bear market. In fact, the term "a volatile market" is usually a euphemism for a bear market. If you think it is a "volatile market" then why should anybody consider buying into it?
To put my personal opinion - I don't think anybody should "short" stocks. Just my personal opinion. But it is also my personal opinion, that there are good times and bad times to be adding to positions. I think that the current time would be an extremely poor time to be adding to positions. In fact, I think, personally, that it is a good time to just lighten up a little.
Maybe, next week I'll change my opinion. What about you?
"Your post doesn't really tell me anything except that the last run from 3200 to 4000 is ending for the time being."
Hooray for you. You got the message. Yes - exactly right. Wonderful insightful reading. :)
I couldn't be plainer than that. What more do you want? Where the stock market will be in six months time? I'm not into that game.
"I think that markets are as equally sensitive to positive news as they are to negative news."
I don't actually think that is true. Sentiment is a powerful factor. When sentiment is positive - all of a sudden news is perceived as "green shoots" and greeted with glee - the market goes up. Then sentiment is negative, and news of "green shoots" is seen as dandelions and the market goes down. Its not the news that matters, but how it is perceived. The news currently, no matter what it is, is perceived as bearish. That might change next week.
"For example the US payroll data resulted in a selling bout, but with indices being released all the time this will be forgotten just as quickly as it was announced and stats next month could paint a different picture."
This suggests that you are a "random walk" advocate. In which case - just buy the index (in Australia that means buying STW) and forget about everything including reading stuff on Hot Copper and indulging in discussion about my submission.
"My advice then is not to continue advocating pessimisic future market underperformance, it is particularly brave to do so."
Yes - you do seem to be a "random walk" advocate. They are most concerned that nobody advocates any position at all - exept to buy the index. Go ahead then. Buy STW - and forget about anything I say.
But - I was advocating back at the end of 2007 that the market was going down. What good would your "random walk" theory have served you over the past year and a half?
Some of us - rather arrogantly, I admit - think we have some understanding of the market and how it works. We're not always right.
But - I'm sure we do better than the buy'n'hold, random walker advocates.
I do feel I've been a bit too aggressive in what I've said.
I try to underplay any strong position I hold. The market is labile - certain to play with our emotions time after time.
If you think that this market is going up. That's your opinion. Good for you. Follow up with your money and buy, buy, buy. But if you are a "random walker" - then just leave your money in a passive index fund, and forget about it.
For me - I think this market is not going up in any sustained fashion in the near future. Maybe I'll change my opinion next week. Maybe I won't.
Anything can happen in the markets.
Cheers Red
For example the US payroll data resulted in a selling bout, but with indices being released all the time this will be forgotten just as quickly as it was announced and stats next month could paint a different picture. My advice then is not to continue advocating pessimisic future market underperformance, it is particularly brave to do so.
(20min delay)