Wednesday, December 31, 2008

HAPPY NEW YEAR!!!

Happy New Year!

This year was the year that defined “smart money” and “dumb money”. There was very little “in between”. This year was also a year full of the unexpected. Complete shockers. Who would have known that all of this stuff would happen?

The only way to trade was to expect the worst…even when we didn’t know how bad it could get. I remember pulling all-niters on Sundays in October, just because I knew something would happen! I’m sure many others had sleepless nights.

I am also sure that many people who have their money managed by a mutual fund or a shitty hedge fund may want to re-think where they invest. The biggest investment should be in yourself through education. You are the master of your money. I met my target of reading over 100 books this year. I read 113. What’s your target for 2009?

The fact is, I turned 24 just last month and I made north of 265%, my best year ever. I made a killing in CWST to cap off the year (just ask my students). I have an I.Q. of about 120, so I’m not a genius, I am just an average person. In fact, I failed Calculus I the first time I took it. The point is, anyone with the right mindset can become a successful trader – yes, even in the worst crisis of our generation.

I am glad that I finally stepped up to the plate to create this blog for the many readers who did want to learn about technical analysis, chart reading, and short-term trading. Going into 2009, I will make my best effort in presenting the technical picture of the market on a daily basis. I take pleasure in doing what I do best.

Below are the usual charts but also my predictions for 2009:


SPX 10-day

SPX 40-day

SPX 4-month

VIX 4-month
---------

The S&P 500 will re-test the 750 lows in the first half of 2009, and we will close below 700 by the end of 2009. This bear market will not end in 2009.

Crude oil will stay below $75/barrel for all of 2009.

Gold will break out above $1100/oz.

The VIX will hit 100 for the first time ever.

Posted unemployment will hit 10.5%. Total Unemployment (U-6) will hit 20%. The Employment Diffusion Index will hit the teens.

Commercial real estate values will drop 30-40%. Land development, office space, warehouses, shopping malls, hotels, and resorts will do the worst. Large multi-family properties will do the “best” because they will house all the folks who will lose their homes.

20% of retailers will file for Chapter 11 bankruptcy.

The bailout money will run out and the Fed/Treasury will request an additional package…and be denied. This debate will drag on for weeks and weeks.

Numerous local municipalities and/or states will go bankrupt. Many states will be unable to pay out full unemployment benefits.

The U.S. will be involved in another war.

A major terrorist attack, economic/financial, and/or political crisis will hit the U.S.

Martial law will be declared and FEMA’s Executive Orders 10990-11921 will be activated by the President. Military units will be deployed on the streets of America. The UN will continue to ship large numbers of military vehicles to the US mostly via Port of Beaumont, TX. There will be a massive build up of military equipment.

----------

Ok, maybe not the last one, but you get the idea. I don’t see how our bear market (in the worst crisis since the Great Depression) can last for only 2 years. The tech bear lasted for more than 2 years and that didn’t even involve a global credit crisis! Bulls should not get too comfortable in 2009. There will be disappointments.

I think this will once again be a trader’s market, rewarding those that are nimble. Join me in battle next year and let’s slay this motherfuckin’ dragon and make some serious money!

P.S. Have fun tonight and tomorrow and try not to get into a situation where YOU’LL need a bailout!

8 comments:

zstock7.com said...

Hi John!!
I'm really concerned about the VIX. I have one indicator says VIX will test RSI 25 = VIX's 200 day. Then , there's the actual RSI at 30.2 bull signal itself. ( VIX at RSI 32 today, I've been predicting that for weeks now)
What a conundrum.
Too bad, I won't know the answer until RSI is at 29.5, or bounces higher off RSI 30.2

Denarii said...

somebody needs a prozac - lol

Anonymous said...

Hey John - very nice work on reading over 100 books. Were they all trading related in some sense?

Mark said...

What are your thoughts on Corinthian Colleges(COCO)?

John C. Lee said...

yes, either trading or finance in some way.

COCO whips around too much.

mikeinalona said...

Hi John-I love your blog and will start serious short term trading when I feel I am ready. Don't be so sure your last prediction won't come to be. We will be a lot safer once Bush is out of office but the potential is still there.

http://www.youtube.com/watch?v=7SbJZ_G-_C8

thomas said...

"Martial law will be declared and FEMA’s Executive Orders 10990-11921 will be activated by the President. Military units will be deployed on the streets of America. The UN will continue to ship large numbers of military vehicles to the US mostly via Port of Beaumont, TX. There will be a massive build up of military equipment."
Ok, I'll bite, nice cheery outlook but where or is it how did you come to this conclusion? Where would the U.N. get military vehicles? This reads like something from 60's era red scare epic. Do tell, this is a less than happy prediction.

John C. Lee said...

UN is already shipping vehicles to the US through Texas.

Several U.S military units are training for civil unrest, or martial law.

I hope doesn't happen, but there needs to be some kind of intentional disaster/crisis for this to happen. Until then, it won't happen.