SOS Slope of Hope

Despite this outlook, keep in mind what The Elliott Wave Theorist said last month: “Even though the market is about to begin its greatest decline ever, the era of hope is not quite finished.”

For as long as another year and a half, there will be rallies, fixes, hopes and reasons to believe in recovery.

Our name for this phase of a bear market is the Slope of Hope. This portion of the decline lasts until the center of the wave, where investors stop estimating upside potential and start being concerned with downside potential.

Economists in the aggregate will probably not recognize that a depression is in force until 2012 or perhaps beyond. That’s the year the 7.5-year cycle is due to roll over (see April 2010 issue). Stock prices should be much lower by then, but optimism will still dominate, and it will show up in the form of big rallies and repeated calls of a bottom.

MyView

This is what Robert Prechter. Many have called him "crying wolf". He has been calling berish since 2000. Even a broken clock is correct twice a day. I think he is going to be very very famoust for his latest call.

This is because he nailed it in the Eliotte Wave, Cycle, Technical and also Fundamental, which forms the Supercycle.

SOS Is it a Dead Cat Bounce

DJIA 7 July Wed up about 400 points 8 July Thur up about 120 points

Yahoo! We are out of the woods. Let me ask Paul. Hello! Paul, UP or DOWN for next 6 months. Well, unfortunately Paul pick DOWN. Ok, now, down how many points, 3000 or 6000? Wheww.... Paul picked 3000. Well, in times of uncertainties, don't trust Bloomberg, CNBC, Fox or Wall Street, don't even trust your brokers or financial analysts, go for the OCTOPUS.

MyView

It doesn't take a genius to figure it out. An octopus is suffice. In the Depression in 1929 to 1932, there are 9 rebounces, average 20 to 24%. In total, it loss about 90% from its peak.

SOS Conquer the Crash

Markets are responding primarily to liquidity flows, not on stocks but also commodities.

Crashes do not typically occur in straight lines. Even they have a structure, with period of bounce and recovery. Each positive sign will probably be taken as the bottom.
Between late 1929 to 1933, the stocks market drop about 90%. During that period, there were 9 rebounds, on average 24% each rebound.

So, why does not many talk about liquidity nowadays? M1, M2 & M3.

SOS What it takes to be a good Trader

By Bob Prechter

1. Method


2. Discipline


3. Experience


4. Take Responsibity


5. Take Losses


6. Take Gain

#3 is a derivatives of #2 is a derivatives of #1

One must established what method to use, Candle stick, Elliott wave, MACD, RSI, etc. Test it out the method. Then choose the method. Discipline is basically follow through with the method. Experience is basically School of Hard Knock, no short cut. Playing with portfolio without real money does not involve emotion, hence only real experience count.

Take responsibility is to acknowledge no system is perfect and you are able to find out why you loose money. Losses is part of the game, don't get too stress out, it may effect your next trade. Gain or super gain is part of the reward of following the steps rigourously.

MyView

Trading is taxing, actually need to master it over time. It takes a while to learn, of course, best is to sit with a mentor for a period of time to reduce your learning curve. But nothing beats real experience and real money.

Spend some time and money to learn from the BEST. Who is the BEST. I believe we have to ask around and talk to lots of people. It is a skill worth learning, spend some time reading books, research on internet, or simply speak with people who trades and make money over a long period of time. Is there a short cut in making money, NO.

All successful people says there are no short cut, do your homework, have passion in your work/investment, use your own expertise, use common sense.

SOS Suprise!

Harry Dent said in May, DJIA will rebound up to 11,800 by Aug 2010 and then straight down to 3,800.

Robert Prechter said in May, DJIA will go down like lightning bolt, zig zag down from now to 2016.

Gary Shillings believe a reasonable DJIA should be around 6,000 points

MyView

They are all deflationists. It is not for us to believe, but things they have been quite accurate previously, of course, some mistakes as well.

SOS why 95% not rich

SOS Get Rich

Over 95% are not rich because:

1. FEAR


2. RISK (lack of knowledge)


3. GET RICH QUICK (impatient)


4. ENVIRONMENT (depends who you mingle with)

The 5% knows:

1. to mingle with the positive people who wants to get rich or already rich


2. build up positive cash flow


3. Leverage - learn to leverage

Steps

1. interest only loan


2. no money down


3. asset alteration (increase room)


4. how to find high yield assets

SOS Portfolio update

Both portfolios started in Oct 2009


Portfolio Inflationist DOWN 5.7%

Portfolio Deflationist UP 6.5%

Different of 12.2%

Uptodate - Deflationist camp is leading by 12.2%.

Japan property and stocks deflated, not its services and daily consumables, transport is expensive, entertainment is expensive, food is expensive, hotel rate is expensive.