Friday, October 03, 2008

A Comment On Comments

A number of you have asked me why I allow rude or insulting comments on this blog. 
The answer is simple. I think these comments provide useful and important evidence for the state of the crowd's mind in the stock market.  As I have noted in the post you can find here, a sure sign of a strong consensus about the market's future direction is the intolerance of people who hold this consensus view towards those who do not share their opinions.
I include some (but by no means all) of the comments of this type because I find them helpful in forming my own views and because I want to document in real time the intolerant nature of crowds.
You will notice that as soon as the market starts to rally comments of this sort virtually disappear from this blog. This happens because the people who make them only gain confidence when the market is going their way. And when they are supremely confident, as they are now, it is a good bet that a big reversal is at hand. 
Added at 11:23 am: Note how quiet the comments section has become as the S&P has rallied 40 points from yesterday's low!

10 comments:

Anonymous said...

mr futia asked legitimately what those of us who have been bearish will do when the market turns...i can only answer as a trader, not an investor.if a buy signal sets up i will buy. if a resell sets up again i will sell... the only way i know that a larger trend is setting up is if i get a series of rebuys on every pullback.

Anonymous said...

Earmarks of a coming outsized runup in which their will be few participants during the early stage:

(1)20+ year housing slump

(2)credit crisis

(3)several months of falling real disposable personal income

(4) shallow business decline for a few months

Anonymous said...

Same story different day. You have said it many times for over a year now. You have been bullish all the way down for a year.

Anonymous said...

Hi Carl,

I just returned late yesterday from three weeks of overseas travel, so I’m posting to you now.

On 9/2/08 at 03:06:00 pm I posted on your blog:

“As I mentioned late last week, a close today below 1285.10 will be a confirmed sell signal for me. It appears we now have it.”

At this moment, my model is still short.

Also, on 9/5/08 at 11:20:00 am I posted on your blog:

“Technical market timing is merely a windsock and not a crystal ball. With that in mind, my timing model tells me that if we reach 1141.90 (give or take a few ticks) and especially on or about October 16th, then we should see serious buying enter the market at that price. This is not a prediction of where the market is going, I personally have no clue, I merely follow my work, and we did have that confirmed sell signal last week as I mentioned to you. So now, IF AND ONLY IF we trade at 1141.90 at any time and especially on or about October 16th, then a very solid rally should commence from that price and time. The closer to that date, the more reliable that rally will be.”

To my own surprise, on September 18th we did actually hit 1141.90 (the actual low that day was 1136.00), and we did have a spirited rally of nearly 150 points within two days. Clearly that rally did not hold since the date was still some distance from the October 16th turn around date.

We are now approaching October 16th. If prices remain above 1141.90 by October 16th, then my model will issue a buy signal and I would cover my short positions and go long. The mere fact that prices have again moved below the 1141.90 level is not a positive sign, but anything can happen between now and October 16th. If/when I receive a buy signal; I will post it here with your permission.

I enjoy reading your blog daily.

Many thanks.

Kindest regards,

PM

Anonymous said...

Well, Carl

your comments are becoming more and more insulting for those who doesn't share your views.

As far as i am concerned, i felt like you today back in 2006 as i turned bearish...I sold most of my stocks and watched the market making new highs despite common sense.

You were among the crowed back then...

Housing crisis won't affect the economy, subprime crisis is contained, economy is strong, all those crapts that brought DoW over 14.000...

And now that reality has finally hit the fan, i should be among the crowed, because even after a 3500 points drop in the DOW, YOU ARE STILL BULISH ?

If you really consider anyone who read you blog as some stupid cnbc watchers, worth enough to give you a sense of the market, you should cloose your blog as there's no point trying to teach something to SHEEPS if this is how you consider your readers...

As you keep disregarding anyone who doesn't share you view, as you doesn't feel the need to give some FUNDAMENTAL arguments about WHAT makes you so bullish, i once more conclude that you have become too much emotional...

You should sometimes answer to the ones who doesn't share your view instead of insulting them...

Good Luck
Balsamo.

Ferd the Moon Cat said...

Carl, I tune in daily; keep it up. Am watching how you play offense in a defensive long-term market. Thanks for sharing what you're doing.

Carl Futia said...

Balsamo:

I didn't mean to hurt your feelings. What did I say that you found so offensive?

Anonymous said...

Carl :

Maybe i have a little overreacted. It's just a feeling that you disregard every readers of your blog that doesn't share your views, and even consider them as some kind of contrary indicator.

A blog should be supposed to encourage dialogue and exchange of idea...

Well never mind,
Good luck
Balsamo

Anonymous said...

This overreaction from Balsamo and some anonymous is just what I wanted to see. Thanks Balsamo,you made me more bullish than ever.

Anonymous said...

You're welcome, anonymous...
Balsamo