Posted on by ColinTwiggs

Never argue with the tape

I daily read predictions of the imminent collapse of stock prices. But ask yourself one question: Is this a bull market or a bear market?

S&P 500

CBOE Volatility Index (VIX) is below 15.

VIX Index

A prudent speculator never argues with the tape. Markets are never wrong, opinions often are.

~ Jesse Livermore

9 Replies to “Never argue with the tape”

  3. More a question.
    With PE’s out of wack with normality! Could you please explain how this could be a bear market. I see it as profitable if you can get out quick. Very Dangerous in my opinion.
    Roy Newell

    1. PE for the S&P 500 is 18.5 based on Dec 2013 earnings, or 15.5 based on forward estimates for 2014. Still a bit on the high side, but I believe this is exaggerated by the strong demand for income stocks, similar to on the ASX, and that growth stocks are closer to fair value. I tweeted something on this in the last few weeks but am struggling to find it. Will post as soon as it comes to hand.

    3. Nimble is as nimble be! I took profits again this morning on the inverted emerging markets funds. I only made 2.2% return on $4344.00. My fund keeps getting higher. I am up just 22% year to date. But of coarse I add $100 a week to help it out. Now that I am back in the money market for the rest of the day, I will sit back and watch the events of the day unfold. I do have one put option- may 40 put on (EEM) and will hold this short position for weeks. I mentioned that I was going to stay short over the weekend but with a 2% profit in the first hour, I had to get nimble and take the profits.

      I still believe that the USA is in deep with the expanding deficit, and the numbers this morning on non-farm payroll are not the truth, they made up the number because real numbers don’t lie.

      My analysis of the Nasdaq is that it should continue to go down.

  4. Colin, Yes this has been a bull market. I got tired of fighting the tape and went long the emerging market last night and got out this morning with more than a 3% return. I am now short for tomorrows markets and Mondays. Will remain short until Mondays close. I still think there could be a possible war in the near future and that our US debt will destroy the markets, but I hope this never happens in my life time. I am only 53. HA!

  5. Could you please show me where I can get the Average True Value 20 on the charts

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