Sky is falling - and here is my shopping list

Sky is falling. Asia and Europe were down big on Monday, as fear of a financial meltdown spreads to the rest of the world. The new fear over the weekend is that big troubles with bond insurers could affect some $1.5 trillion of bonds. Expect another big sell-off on Tuesday. That could set us up for a sharp rebound (with or without the FED stepping in to help) that will eventually take the S&P500 index from a possible next week's low of 1260~1270 to a rebounding high of 1380 – 1420 area. This kind of bear-market rally (back-filling) happened from time to time during the 2000 – 2002 bear market (see the monthly SPY chart below). But once the rebound is over, the market will most likely resume its slide again. So the plan here is to use this week's further sell-off to load up some stocks, but be ready to sell into rallies once the market moves back to the 1380 – 1400 area.

Expect a choppy ride for the rest of the year, but I don't expect this to be the 2000 – 2002 kind of bear market that lasted for over 2 years long. So I'll play more cautiously until a clearer picture emerges - maybe by the second half of the year.

Meanwhile, here is my shopping list for an anticipated sharp rebound (disclaimer: do you own research as the market is very risky at the moment):



S&P 500 proxy SPY monthly chart

所有跟帖： 

• 168: Thanks for sharing - nice thoughts -老周- ♂ (0 bytes) () 01/21/2008 postreply 11:45:14

• Thanks -zengjp- ♂ (11 bytes) () 01/21/2008 postreply 12:07:48

• Thanks, your sharing is always highly appreciated -抛玉引砖- ♂ (0 bytes) () 01/21/2008 postreply 12:08:48

• do you still hold you long like"vip""ctrp".....thanks -laixuexi- ♀ (0 bytes) () 01/21/2008 postreply 12:15:22

• I do, not as heavy as before... trimmed some lately -street168- ♂ (0 bytes) () 01/21/2008 postreply 12:22:11

• thanks. -laixuexi- ♀ (0 bytes) () 01/21/2008 postreply 12:22:57

• Thanks for sharing. Good info. -Sunron- ♀ (0 bytes) () 01/21/2008 postreply 12:21:34

• YTD, I am as disappointed as most people here... -Street168- ♂ (448 bytes) () 01/21/2008 postreply 12:30:00

• Thanks for sharing 168. -JR98- ♂ (0 bytes) () 01/21/2008 postreply 12:56:24

• 回复：Thanks for the list. -orchestrator- ♀ (0 bytes) () 01/21/2008 postreply 14:35:54

• Thanks for sharing - most of us perhaps -xyz2001- ♂ (670 bytes) () 01/21/2008 postreply 14:39:08

• Buying put on Citi may indeed be a good hedge -street168- ♂ (500 bytes) () 01/21/2008 postreply 15:10:41

• 回复：Sky is falling - and here is my shopping list -egghead1- ♂ (152 bytes) () 01/21/2008 postreply 15:45:55

• 看到没有这么多所谓抄底的,还得跌啊 -0110- ♂ (0 bytes) () 01/21/2008 postreply 19:50:21

• 回复：Sky is falling - and here is my shopping list -ryanx30- ♂ (152 bytes) () 01/21/2008 postreply 21:12:22

• Thank you for sharing, what do you think about CAF? -WangLung- ♂ (0 bytes) () 01/22/2008 postreply 11:11:05