The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

06 June 2006

Circling the drain

It is rare, indeed, when so many chart patterns look so horrid. Must everything go down the drain concurrently? I warned ~5-6 weeks ago that the former leaders (resources, materials, cyclical, etc) looked toppy, and would decline hard, and suddenly. But the many attempts to create a rotational market -- to possible new leaders from the erstwhile leaders -- are met with a ceiling of selling pressure. Talk about surface tension! Market pros tried the consumer non-durables -- no luck; they tried the chicken cyclicals -- again, no luck. And so it goes.

It amazes me to see so many bearish patterns cluster as they do now, and across sectors and groups. It appears all but obvious, at least to me, that this decline will become increasingly painful before it improves. Do not allow yourself (or your portfolio) to be suckered into the market, or you likely will be sucker-punched by the market. Sorry, Greg, but your selections of BHP, CCJ, RTP, and the railroads as possible investment opportunities look equally horrid to the rest of the market.

Here is an interesting email I just now received...
"There was a time in the past when I would have been lured back into the market by the movement of the last few days and then upset with today (yesterday). Instead, I went about what I do with nary a care."
Yeah, ain't that the truth!
-- David M Gordon / The Deipnosophist

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