Andy Zaky’s positive 2011 outlook on equities

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    Posted: 04 November 2010 03:39 PM

    Andy’s article

    This is indeed the most important week of the year, and maybe even the most important week of the entire business cycle. Whatever happens, there will be a huge opportunity to make some significant gains in 2011. Either the market will breakout today and continue to run until year end, or we’ll get our much needed correction after rallying nearly 20% in a little over 2 months on the NASDAQ.

    [.... snip .... ]

    Notice these price targets are not based on fundamentals but on a theory of asset inflation. We’re going to get a new mini-tech bubble much like what we saw in 1999-2000. Just because things might become overvalued, doesn’t mean we can’t go much much higher. A significant break above $55 on the QQQQ suggests a 70% move in Apple.

    Disclosure: On the sidelines awaiting directional clarity.

    Andy must be in trader mode more than investor mode.

         
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    Posted: 04 November 2010 03:53 PM #1

    He is a trader.

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    Posted: 04 November 2010 09:22 PM #2

    Tetrachloride - 04 November 2010 06:39 PM

    Andy must be in trader mode more than investor mode.

    Wondered where Andy had been, no articles in 2 weeks.

    I guess we got the “breakout” option he was positing. Nice seeing him so bullish on AAPL and the market in general, even if I do think tech analysis is hogwash.

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    Posted: 04 November 2010 09:51 PM #3

    Andy, as much as I love the guy, drives forward, looking in a rearview mirror….

    For example, in AUGUST.

    Warning Signs Suggest Market Headed for Another Collapse

    Read it here: -> http://seekingalpha.com/article/217966-warning-signs-suggest-market-headed-for-another-collapse

    TA guys never seem to “get” that ultimately, fundamentals rule. Must come from believing the “snake entrails” that charts “reveal to them.”

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    Posted: 04 November 2010 10:54 PM #4

    TanToday - 05 November 2010 12:51 AM

    Andy, as much as I love the guy, drives forward, looking in a rearview mirror….

    For example, in AUGUST.

    Warning Signs Suggest Market Headed for Another Collapse

    Read it here: -> http://seekingalpha.com/article/217966-warning-signs-suggest-market-headed-for-another-collapse

    TA guys never seem to “get” that ultimately, fundamentals rule. Must come from believing the “snake entrails” that charts “reveal to them.”

    Wow!  TanToday, you’re cruel.  I’ve been resisting to break other guys’ godly image of him.  He is strong at fundamental analysis but his trading strategy doesn’t make sense (refer to comments after the quote).  Since you’ve started, I recall he advocated to AFBers to sell all out of AAPL in May-Jul 09.  I searched and extracted these:

    andyzaky - 09 July 2009 08:43 PM
    andyzaky - 04 May 2009 06:27 PM

    Update:  If the DJIA hits 9,000, sell Apple at whatever price it is trading at.  Buy Apple back when the DJIA pulls back to 7,800 and hold for the long term.  The DJIA is in the process of climbing to its neck line at 9,000.  I expect the dow to make its right and final shoulder down at around the 7,500 level.  That will be the final bottom in this market and will mark the beginning of a massive multi-year bull market.  If you bought Apple in the $80’s under my recommendation, it might be time to consider selling some of that position in the $130’s.  Its time to taper back just a little and to sell the reset of that position if the dow hits 9,000.  Best regards and happy trading/investing.

    Best,

    Andy


    I made the above comment on May 4th and only now are traders starting to see this inverse head and shoulders on the SP500 and on the DJIA.  Optimally, a sale of Apple at the $140 level would have been excellent.  I took short positions at the $143 level and have just recently covered those position and now I’m all cash. I still stand by my recommendation that Apple should have been sold at $140 and people should renter those long positions when the dow is at 7,500 and the SP500 is sitting near the 740 level.  I think once that correction is over, the market will go into a multi year bull market.  Personally, I’m going long at whatever price point Apple is sitting at when the SP500 is at around 740. 

    Best,
    Andy Zaky

    Above is extracted from this thread.  He recommended to sell out AAPLs and wait for S&P to decline to 740 before reloading. Upon reading his recommendation, Mercel and I felt that it is not wise to go all-out and wait to be all-in again, better to do nothing or if so comfortable then hedge by buying some puts, since after the correction is a multi-year bull market.  S&P didn’t decline to 740, it bounced off 870 and shot up all the way to 1219 and AAPL shot up all the way to $279, sorry for those guys who sold out and still waiting for signal to buy.  It is not clear when he has changed his mind (I’m certain he did) and bought back AAPL (at what price?).

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    Posted: 04 November 2010 10:57 PM #5

    Speaking of Mercel, where did he go?

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    Posted: 04 November 2010 11:13 PM #6

    Mace - 05 November 2010 01:54 AM

    Wow!  TanToday, you’re cruel.  I’ve been resisting to break other guys’ godly image of him.

    When a man puts himself out there as a PUNDIT FOR SALE { publishing predictions…}, HOLDING his former predictions against him, for credibilty is certainly not cruel. It IS however, prudent, to ascertain certain track records BEFORE listening to the pundit interpreting the “chicken entrails” they love to pretend is magical artform…..also known as Technical Analysis.

    I have a rule I follow, unless you are right more than 75% of the time, why would I listen to you?

    Heck, you get a “gimmie at 50%” since a coin toss gives you those odds. And frankly, IF YOU WERE TO ACTUALLY hold these TA guys to that standard, they would look more like THIS than real financial guru’s….

    { AGAIN…I do like Andy, he is a good guy, I just don’t like or believe chartists are any better at predicting the future than weathermen are at predicting the weather 5 days out or more….}

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    “Even in the worst of times, someone turns a profit. . ” —#162 Ferengi: Rules of Acquisition

         
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    Posted: 04 November 2010 11:30 PM #7

    Ha ha ha, chicken entrails, that is so funny because I have been thinking of that sort of analogy for a long time (is that a common one for tech analysis?).

    Reminds me of a scene from one of my favorite books/movies, Lonesome Dove, where the cook has Gus (Robert Duvall) spit into his wagon to analyze it to determine if he will get married again.

    Markets are governed by psychology, not mathematical analysis of prior events.

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    Posted: 05 November 2010 12:43 AM #8

    JDSoCal - 05 November 2010 02:30 AM

    Markets are governed by psychology, not mathematical analysis of prior events.

    In the short run, yes.

    In the LONGER RUN, one thing counts, making real profits, and growing the enterprise. All one has to do is to look back at China. Forty years ago, when I was in high school, they were walking along behind water buffalo’s, smelling the bog stench whilst planting rice. The only thing the world wanted that they made were AK-47s.

    Today, they are minting more real Millionaires than anywhere in the world, since the USA before the era of intrusive Big Brother government.  We started going downhill with the 1913 Jekyll Island soiree and when the CFR became the real shadow government, with one goal, to MILK US, for our money, expertise, men, blood and souls so THEY could build their vaunted New World ODOR.

    The Chinese are under no such illusions, they decided to GET RICH, and RICH IS GLORIOUS, whilst our dumbo leaders want to make everyone equal, and as “Y’shua said…The POOR will always be with you…” I believed Him.

    Unfortunately, it seems to be trending towards, MOST of us will be working as poor coolies for the former rice paddy plowman now millionaires from China.

    Isn’t it sad and telling that the Communists actually are better at Capitalism than the Bozo’s we have running our governments and regulatory agencies these days?

    Think about that.

    [ Edited: 05 November 2010 12:58 AM by TanToday ]

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    “Even in the worst of times, someone turns a profit. . ” —#162 Ferengi: Rules of Acquisition

         
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    Posted: 05 November 2010 01:04 AM #9

    TanToday - 05 November 2010 03:43 AM

    ... our ... leaders want to make everyone equal, and as “Y’shua said…The POOR will always be with you…” I believed Him.

    Even if they succeeded in equalizing each person’s net worth, after a couple of years, the ex-rich would become rich, the ex-poor would become poor.  The ex-poor would become poor again because they don’t plan for the future and spend impulsively.  The ex-rich would become rich again because they invest wisely and spend prudently.  What the leaders should do is level the playing ground, provide equal opportunity and ensure everybody play fair.  Bailing out the crooks is out.  Giving $ to foolish bond investors is out.  Shafting a house to guys who can’t balance their budget is out.

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  • Posted: 05 November 2010 01:21 AM #10

    My record of technical analysis does not meet Tan’s standard, and probably not even the coin-flip standard.  So nobody should ever take my technical opinion as more than entertainment.

    I will point out, however, that there is a strong fundamental force that provides a tailwind for Andy’s prediction.  The Fed wants the market to go up, and it is backing it up with action.  $600B worth not counting multipliers (if you believe in them).  And that is in addition to what has gone before.

    As my old friend Marty Zweig was fond of saying, “Don’t fight the Fed”.

    And I don’t fight them, but I am hedged a bit.  grin

         
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    Posted: 05 November 2010 02:21 AM #11

    TanToday - 05 November 2010 03:43 AM

    Isn’t it sad and telling that the Communists actually are better at Capitalism than the Bozo’s we have running our governments and regulatory agencies these days?

    Sad, but not surprising. Everyone is born a capitalist. You have to be made a communist. Looking out for oneself, acquiring stuff for yourself and your family, is a natural product of evolution. It’s human nature to try to survive and prosper.

    Only through an utter denial of human nature - and, of course, compulsion - can communism exist. Lift the yoke of forced collectivism, and people revert to human nature. China did this, and allowed a ground-up sprouting of capitalism (this is all a government has to do for capitalism, get the hell out of the way - leftism, OTOH, requires government theft and compulsion - which seems more natural?). Russia, unfortunately, couldn’t (or wouldn’t) shake its central planning tradition and tried it from the top-down, and got crony capitalism, a few uber-rich barons, FOP’s (Friends of Putin). No wonder the Russians weren’t thrilled.

    But the Chinese are! And since, unlike Americans, they have zero illusions about the ability of leftism to provide for them - having actually lived through its failures - they are even more natural capitalists than spoiled, soft, deluded Americans. Ironically, it took leftism to show Chinese how bad things can get, while the (albeit, highly taxed and regulated, sort-of) capitalism has provided so well for Americans, they think we can’t possibly lose (or that they have seen bad times, LOL). I guess it takes leftism to show people how good capitalism is, which is why Eastern Europe loves the US so much.

    As I heard some pundit put it brilliantly the other day, “The right looks at humankind for what it is, the left looks toward what it should be.” I’d add, “with brainwashing, theft, and compulsion.” Can you trust any system which must be forced on someone at gunpoint, and without theft and compulsion, wouldn’t work? Then again, even with theft and compulsion, it doesn’t work.

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  • Posted: 05 November 2010 07:15 AM #12

    @JDSoCal - brilliant rant.  Couldn’t agree more with you.

         
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    Posted: 05 November 2010 09:36 AM #13

    Please confine political rants to the “Political Rants” thread where they can be easily ignored by those who don’t give a shit abount anyone’s political opinions. 

    Thank you. smile

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  • Posted: 05 November 2010 11:39 AM #14

    TanToday - 05 November 2010 03:43 AM
    JDSoCal - 05 November 2010 02:30 AM

    Markets are governed by psychology, not mathematical analysis of prior events.

    In the short run, yes.

    In the LONGER RUN, one thing counts, making real profits, and growing the enterprise. All one has to do is to look back at China. Forty years ago, when I was in high school, they were walking along behind water buffalo’s, smelling the bog stench whilst planting rice. The only thing the world wanted that they made were AK-47s.

    Today, they are minting more real Millionaires than anywhere in the world, since the USA before the era of intrusive Big Brother government.  We started going downhill with the 1913 Jekyll Island soiree and when the CFR became the real shadow government, with one goal, to MILK US, for our money, expertise, men, blood and souls so THEY could build their vaunted New World ODOR.

    The Chinese are under no such illusions, they decided to GET RICH, and RICH IS GLORIOUS, whilst our dumbo leaders want to make everyone equal, and as “Y’shua said…The POOR will always be with you…” I believed Him.

    Unfortunately, it seems to be trending towards, MOST of us will be working as poor coolies for the former rice paddy plowman now millionaires from China.

    Isn’t it sad and telling that the Communists actually are better at Capitalism than the Bozo’s we have running our governments and regulatory agencies these days?

    Think about that.

    Tan:
    Is it possible that China is better at Capitalism because they are strategic and do Big Government better than we do?

         
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    Posted: 05 November 2010 01:28 PM #15

    Hannibal - 05 November 2010 02:39 PM

    ... Tan:
    Is it possible that China is better at Capitalism because they are strategic and do Big Government better than we do?

    I’m not TanToday.  At the human level yes.  At the nature level, just one of those cycle.  China used to be the most powerful nation, then the west becomes strong, now is back to the East, that’s about it.

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