Sell, Sell, Sell

Filed in BP, earnings, economy, Gold, GOld juniors, mongolia, Netflix, o, sov by on December 20, 2010 0 Comments

Here it is, the end of another fantastic year. The NASDAQ is up 26% over the last 52 weeks, the S&P500 is up 24%, and the DJIA is up 20%. Heck, it’s been a great year at Crisis & Opportunity as well. Readers have seen gains of 759% in a small Mongolian oil company, 52% on a cruise ship in a week, and 251% gains on a safety syringe maker. Lets face it: greed is back. The speculators have returned and the fast money is seeking risk. Froth is back There is no better example of this froth than the hot Chinese IPO’s Youku.com. Called the “Netflix of China,” it returned 161% on the first day. All sorts of companies are running. New Energy Technologies (NENE.OB)— one of Jeff Siegel’s picks — went from 0.31 to $3.29 in a month. And lastly, one of my garbage stocks, Madcatz (ASE: MCZ), a purveyor of video game accessories, shot up 250% in a few weeks. That type of momentum chasing doesn’t happen in bear markets; in fact it’s more indicative of a top. I’ve written before that this market is setting up just as it did in 2004. We are three years after a massive market correction. The Fed and Congress are doing everything they can to shoot money into the economy. We’ve just had a major stock market rally similar to 2003, and the vast spectrum of negatives from housing to jobs seems to be getting better… Here is what 2004 looked like: There’s a chart that will give you indigestion on the way to a 10% gain. Every rally was sold hard, blowing out the longs. Every dip reversed strong destroying the shorts. Double dip was the dominant fear. And every sell-off got run over by easy money from the Fed. Looking at this chart, there is no easy way to tell when a …

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Sell, Sell, Sell

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