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Even the Bulls are Getting Nervous

Posted Aug 31, 2009 09:56am EDT by Aaron Task in Investing
Stocks stumbled Monday morning, following another overnight dive by China's Shanghai Composite and another weekend of stories about how the rally has come "too far, too fast."

Even the typically bullish James Altucher, managing partner of Formula Capital, is braced for a short-term pullback and net short at present. Altucher is expecting a quick 2% to 5% decline in the S&P 500 and is currently short the S&P 500 SPDR and Google in anticipation.

"I can give you 25 reasons why I think the market's going to be up huge next year but you can't go crazy buying every single day," Altucher says. "Right now, everybody needs to take a little break, needs to relax a little bit."

"Everything is going a little crazy" lately, he continues, citing the huge volume spike last week in so- called zombie stocks like AIG, Citigroup, Fannie Mae and Freddie Mac. "The entire market is one massive short squeeze."

On the other hand, Altucher says investors are better off ignoring all the warnings about September and October. While we are entering what's historically been a rough season for stocks, Altucher says there's no statistical basis to be worried, calling the media's focus on September and October a "random, spurious indicator."

Again, that's evidence of Altucher's bullish nature, which is why it's notable that even he is positioned for a decline of some magnitude in the short term.

100 Comments

- Monday August 31, 2009 10:10AM EDT

Stocks are bullshit.

- Monday August 31, 2009 10:16AM EDT

It's funny how all these markets that are struggling are the ones being pumped with cash. The markets are not real and not based on earnings. The US goverment uses something called the exchange stabilization fund to move stuff the way it wants, it is the real plunge protection team.

- Monday August 31, 2009 10:17AM EDT

As long as public money flush into the stocks it won't collapses. It is just time that our greedy fellows take the money and run while most americans have lost their saves of a liife. Tick, tack, tick, tack. This is the spiral os death.

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:19AM EDT

I'm not going to over analyze this market run-up, I'm just going to make two quick observations: 1) Weren't all the guru's saying that we would need the consumer to pull us out of this recession? How's that working out? 2) Have any of these so-called economists ever been to China? I mean really been there, down with the unwashed masses and not observing market forces from the comfort of their five star accommodations, because I have and I’ll tell you this, when a delicious meal at a restaurant can cost you less than a few bucks and that is a stretch for a large majority of the populace, then do you really think they are going to rescue us from this malaise?

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:20AM EDT

I would LOVE to hear his Top 10. If he is so confident, he would be puking those 25 reasons out like last night's spoiled egg salad. But, as usual, he is just doing the usual bait and switch on the ignorant masses.

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:27AM EDT

This man has no credibility. His entire record is "spurious" at best.

- Monday August 31, 2009 10:28AM EDT

Finally Japan is realizing what an anchor the US is becoming. I cannot blame them for wanting to redefine their relationship with America. The world is beginning to realize what Americans will not. The US is in a perpetual decline as the government consumes itself and sells out the people. The government is becoming everything. They own Americans instead of the other way around. So who really cares about the markets anymore. They are so manipulated that Disneyland has more reality. If you try and judge the health of America by our deluded markets you are drinking government koolaid.

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:32AM EDT

He's spent too much time with Cramer. Let's hear his top ten reasons the stock market is poised for flight next year......

- Monday August 31, 2009 10:35AM EDT

bull-shirt

- Monday August 31, 2009 10:38AM EDT

"since 1973, when the limitations existing of a currently non-replaceable energy were discovered, we went through a recessive period with serious risks of short-term economic collapse. This is because production concentration processes are characteristic of recessive stages, with significant amounts of capital being driven from production processes and being forced, inevitably, into speculation. Such speculation generates a bubble that will first be seen in real estate, subsequently in the Stock Markets, and will necessarily burst due to the devaluation of capital which cannot be transformed into energy, giving rise to the crises associated with this phenomenon. Our aim will be to justify that the only way out of this situation is to transform the current recessive stage into an expansive one by searching for and locating new sources of apparently unlimited energy."

- Monday August 31, 2009 10:38AM EDT

Pavlov's dog has been trained!

- Monday August 31, 2009 10:41AM EDT

WOOOOT! I bought Marvel Entertainment in March :) Just sold it for nearly $50 a share!! Thank god Im a comic book fan!! LOLOLOLOL TY Disney!

- Monday August 31, 2009 10:42AM EDT

It looks like Asia has smarter investors then here in America. It's time to get out and watch the market pullback alittle.

- Monday August 31, 2009 10:42AM EDT

The decoupling of China and the U.S. will not happen overnight but it will happen. One poster referred to the majority of China as "unwashed masses". Well, that describes most Americans of 100 years ago. By today's standards, 99% of Americans were impoverished in 1900. It takes time for a country to build wealth and establish a middle class. When there are a sufficient number of middle class Chinese, they will be able to purchase their own products and won't have to rely on exporting to America.

- Monday August 31, 2009 10:52AM EDT

You have billions being poured into the Market thru employee 401 plans and other retirement savings, this constant flow of cash will keep the Market stabilized. The quick buck Guys always get nervous.

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:54AM EDT

If the stock market is "the next bubble", which it could well be, we actually could be looking at big gains next year.. never mind reality... how real was the jump in housing prices before the collapse?... I'm just saying

- Monday August 31, 2009 10:54AM EDT

It must be depressing for you "DOW 6500 SELL EVERYTHING NOW!" guys to see the market calmly ticking up every day. So enjoy today, even though we're already off the lows. I'll be buying calls.

- Monday August 31, 2009 10:54AM EDT

Yeah, the market will be going up...in smoke. Got money to burn?

- Monday August 31, 2009 10:55AM EDT

Technology improvements and inventions are part of an improving society. Technology is maturing and we will not have as many new inventions in the future. This points to a mundane economy in the future not at all like the last fifty years.

Yahoo! Finance User
Yahoo! Finance User - Monday August 31, 2009 10:57AM EDT

What goes up, must come down , just like in sex. Get it? Ha ha, ha ha. I should patent my jokes.

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