I’m Selling and Going Straight to Crash

bears love put options trading

The script for 2015 has yet to change.  Stocks gyrate around intra-day, intra-week, before hitting fresh record highs.  The market then proceeds to pull back, eliciting the "here it is" type reaction in reference to the much awaited market correction.  The bears draw all sorts of nasty red arrows... and state the crash of 2010, 2011, 2012, 2013, 2014... oh wait this is 2015...... the crash of 2015 that they forecasted  is finally coming to fruition.  We are mere mortals in the face of these market Gods.  Let us bow to their endless crash calls.

What a terribly wonderful chart by Jon Boorman.  In one picture you see just how wrong some of these pundits are.  Every year they call for a crash and every year when it doesn't happen they just move the date forward... as if their previous crash call never even happened.

Since the lows in March 2009 the stock market has rallied in the face of weakness.  It has defied all attempts at a sharp and swift correction.  But let's face it, the market can not go up in a straight line forever.  Central Banks can not maintain their unprecedented support of the financial system forever.  And at some point the market will correct sharply.  The pundits from 2010, 2011, 2012, 2013, 2014, and 2015 will, after being wrong for 6+ years, will finally be right.  And we will certainly be hearing about it.

I posit that positioning for a crash is more hazardous to your investment account than enduring said crash.  When Jim Cramer of Mad Money fame came on the Today Show in  2008 telling the world to sell all their stocks and go to cash,... it was a great call.... for about 3 months.  But for the other 4 years and 9 months it was the worst thing you could have ever done with your investment capital.  Those selling during the financial crisis missed out  on the most spectacular stock market rally of our lifetime.

Those who endured the financial crisis have reaped some incredible gains.  GM blew up, AIG collapsed, Fannie and Freddie, banks were going belly up on a weekly basis.  There were plenty of wrecks, but amid the chaos those holding shares in quality companies were rewarded handsomely.  The financial crisis in 2008 for many of these companies was not a time to be selling, but instead a once in a lifetime opportunity to buy.

So when those 'market pundits' call for a crash next year, and/or the following year, tell them to Bring it on!  You don't get the opportunity to buy stocks at lifetime lows too often.

Charts with financial crisis highlighted:






Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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