Let's go to our very own smedleyb, the MMM forum's beloved activist trader:
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June 2, 2012: S&P500 stood at 1278, its lowest value in 6 months, following a 9% drop in the previous month. He said:
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The massive sell-off in our markets on Friday -- and their failure to muster any sort of bounce into the close while trading below the important technical level of 1284 (200 day moving average) -- suggests to this seasoned market watcher that the potential exists for an epic sell off which will cut deeper and sink faster than anyone can imagine. Yeah, yeah, it's impossible to time the market, etc. I get it. But let's not ignore what's before our eyes: this market is deteriorating quickly, and unless Europe produces its own fiscal bazooka soon, the worst may be still yet to come. And I mean bad worst.
I say ready your cash and prepare to strike."
The next day, the index went up, and since then, it has never returned to that 1278 level, or anything even close to it. It currently stands at 2111. If you had followed that advice to "ready your cash", you would have sold at a 6-month low, and never had a chance to buy back in. The ability to hit the timing that perfectly wrong is remarkable!
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June 11, 2012: Nine days later, S&P500 had risen to 1326, but, while dropping in his hedges as always, he wasn't ready to give up his prediction:
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this was hardly the financial bazooka the markets have been looking for. The chance remains that today was a fakeout move and Europe could ignite to the upside over the next week -- but today's reaction does not support that possibility, and the onus falls again on the bulls to prove that the Spanish bailout is the beginning of something significant and not a belated act of desperation by the EU."
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July 31, 2012: 7 weeks later, he sort of admitted he was wrong.
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It appears Europe did indeed enter a period of calm following the early June dip as most Euro indices are up anywhere from 5-10% over that time."
Wise for once, he had no strong predictions either way. Oh, except to promise volatility:
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It's put up or shut up time for Europe as the health and stability of global stock and debt markets hang in the balance.
Hold on to your hats because this week promises to be a bumpy ride."
S&P500 values for the week:
1385
1379 -0.4%
1375 -0.3%
1365 -0.2%
1391 +1.2%
Up 0.4% for the week. Even the most ephemeral, floppy hat would have stayed on your head in those mild breezes.
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Oh wait, later the same day, he did make a more-concrete prediction:
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My plan is to short any spike up to 1400 over the next couple days (via Oct Spy puts)"
The S&P500 did indeed break above 1400 seven days later. And then it did drop back below that level! For two weeks. In November. Whoops. And of course it has never returned to that level again.
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November 29, 2012: S&P500 at 1410, after a 4.2% rise over the previous two weeks.
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That said, shorting the QQQ's in size this morning (66.07). File this rally under "too far too fast."
Yeah, I know this broken record is getting old, you know what comes next. S&P500 never dropped below 1410 again.
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December 18, 2012: Just to show I'm not cherry picking, on this day, Ford was at $11.67.
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I've accumulated a not insignificant amount of Ford shares the past two days. Stock has recently broken out of 2 year down trend, and the credit fundamentals at the company are the best they've been in years (suggesting cheaper borrowing costs going forward). Throw in the hot-looking Fusion and a revamped Lincoln line, I think $15 is in the bag over the next couple of months. Setting sell stops under the $10.50-$11.00 range just in case I'm wrong, which I often am."
Ford has never again dropped below that level, so he got one right. Well, assuming he could hold on until May 2012, when it finally hit $15 (a much longer wait than his hoped-for "couple of months").
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December 28, 2012: Ten days later.
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Selling entire F position at 12.76"
LOL.
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