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The Way Forward

April 4, 2009
Average Home Price since and before

Given the fact, that the housing prices have fallen just the 50% or 66% or something, is it a doubt that this market has more bear teeth left in it?

Historically, bubbles overcorrect. They tend to retrace way beyond the levels, from which bubble originally started. For more such nitty gritties of identifying a bubble read this: The Anatomy of a Bubble-II Hence all this talk of  “is it a bottom”? or expecting a V-shaped recovery is idiotic.

You might have noticed[in case you were a loyal reader], of my previous posts on $SPX rallying way higher than what is warranted.Its possible that a more larger channel top is being tested [as opposed to the one shown here]

Till then, keep a strictest of stops on your stocks, average up and average aggressively if you wish to on the stocks showing upward momentum,sell the stocks which fail to get enthused, use that cash to buy new stocks which are showing bullishness but remember in the “high of the moment and adrenaline rush”, this is all fake.

Fake, fake, fake!

And its bound to show its true colors. Till then keep sparring, edging,defending,hitting so that your portfolio shows less loss and who knows you might be able to square up all your losses and come out of this bear market with minimal losses, lots of emotional pain to your “stock picking fundamentals loving ego” and 5 years of time out of your life.
Otherwise nothing much changed!

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