Bear Market Rally Ended Friday

By: Hans Lysglimt

On Friday the S&P was down 2%, NASDAQ down 1.8% and the DOW down 1.7%. I predicted the rally would end last week, and I will call this as the end of the bar market rally. So, we feel somewhat vindicated.
This downturn would have continued in Asia, had the market been allowed to set it’s course.

But there comes Obama trying to prop up confidence again on Sunday in his speech, Asia rallies Monday morning. I wish Barack would join his wife and work on the White House garden more – it would be more helpful for everyone.

Yet, this confidence will not last – we have seen that many times. The speeches only hold for a day or two. I expect a major setback this week. That is a strong call, we’ll see.

Gold is holding up.
We are sticking to gold, and we advice you to do so as well.
As Mises said “Make your peace with gold.”

Make your peace with gold.

Oslo, Norway.
March 23. 2009
Hans Lysglimt

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3 Comments

  1. Kris
    Posted 23 March, 2009 at 3:22 pm | Permalink

    The rally does not seem over watching US after the Geithner plan.

    Farmann, maybe you should keep focusing on the longterm. It’s the only thing that can be predicted :) Trying to predict shortterm, and one will be wrong 50% of the time.

    I think Buffett’s answer, is Obama pushing us into depression, would be “we don’t know”. Maybe it is, maybe it’s not. :-)

  2. Posted 23 March, 2009 at 11:20 pm | Permalink

    Heh, that bear market rally is pretty darn strong. I got out of my long positions last week at 800. Thank God I didn’t try to short it then. I think it is likely that we get to S&P 875 before we roll over now. Should make for a great shorting opportunity in a few weeks, but patience is needed. Don’t try to short it right now!

    And in other news, the charts for gold don’t exactly look bullish now, so I would advice you to wait or at least not go all in right now. Retrace to $800 could happen within a few weeks.

    My master plan right now is wait for a confirmation the bull run has ended. I will try to post here when I see it. Then get aggressively short. Once we get down to the “Depths of hell” (S&P under 500), I take the money off the table and buy a kilo of gold :)

  3. Kris
    Posted 24 March, 2009 at 9:17 am | Permalink

    Remember, in the inflationary period, 1980 and 1990′s, Gold fell 75% from top. Maybe it’s not inflationary period that drives gold now, maybe it’s just panic and fear and that everyone recommends it?

    Gold has really become much cheaper… Dollar is down 10% vs nok latly, + Gold is down from $1000? to $920 or something? That is almost a 20% fall?

    We will see, I don’t disagree with US going into depression, and you guys have Farmann have had so much more right the last couple of years than every Aker Brygge analyst saying that it’s a buying opportunity.

    But if we really get a depression or not, I think the answer is ‘we don’t know. we can’t say. noone has been able to predict the market correct twice… ever’

    And now Farmann has been correct along long time.. will you also be correct the next round?

    Lets hope norwegian real estate falls soon btw..

    Also, I see that almost every analyst is saying this is a ‘bear market rally’. I also think it is just that, but since everyone think’s it is, maybe actually the bottom has passed? Maybe this is not a bear market rally but the real bottom??

    Kris