Funny, I have not checked this forum in a while and last time I was here everyone thought option_trader was a lunatic. Turns out he was right - and a lot of us (me included) missed out on an incredible rally because we were stuck in bear mode. Those who think we are going to retest the March lows are dreaming, unless we get some game-changing news, like another major financial institution collapsing or some similar event.
Thank you Fundamentally, many people got it right. There's no reason for this market to go up. But they forgot one thing: Even till now, take a look at the posts in ET .. most still want to short the equity market. But they forgot about the power of money printing. Even Jim Rogers said he didn't have any huge short position like before. Remember, he called Freddie, Fannie, Citi and stuck with his conviction waaaay ahead of the others. He called the dollar rally in time. Now he's short the US dollar (and still short). As he said "It is a very flawed currency". Goldman Sachs could've been another Bear Stern without the bailout and money printing. What we are witnessing is the most blatant corruption ever. Those who take excessive risks got bailed out and those who did the right thing got their purchasing power eroded. The backstop: American taxpayers, whom, most of them never know any of this stuff. The further devaluation of the dollar will erode the purchasing power of those who are still faithful to the US dollar. You know Bernanke is printing and actually the stock market actually never went up very much in other currencies. This is just an illusion to ease the pain of those 401(k) holders. SEC, FINRA, etc are just puppets. Investors are on their own here. They're punishing the little guys and protecting their cronnies. Forget it. They can change the rule of the game, try to intervene the equity market, etc. They will try to blame it on shortsellers or find other scapegoats to save their face and their friends' face. Nobody ever blamed the snake oil salesman like Cramer who destroyed many people's portfolio. He's still on TV now, right? Never went to prison for what he did. Now, many people still want to short and just because of that one period where US$ spiked from 71 to 89, everyone got bullish on the US dollar. Well, traders who listen to CNBC when people were shouting "deflation deflation" got corned. It's a lie. Huge lie. Bernanke cannot pull the QE anymore without crashing the system. And with politics, there will be 2nd, 3rd, 4th, 5th stimulus package. Cash for Clunkers. Healthcare. More bailouts. More money printing out of thin air. More debt monetization. Guess what - there will be *hyperinflation*. 250 billions of bond sales in a week. Seriously Ben is the buyer of last resort. It's just a matter of time. They are trying to cover this up so there won't be a panic and everything goes in an orderly fashion. That's why shorting US dollar is and will still be one of the most profitable trades, in my humblest opinion (money management is important). US dollar bear raid! This is going to be very impulsive and without mercy. The SEC cannot control the currency market and can't blame it on the wannabe retail shorts again on this. This does not mean there won' t be another dollar spike to sucker all the US dollar permabulls again. Nothing goes on a straight line. In the equity market, SEC can scare retail shortsellers with "uptick" or "no naked shorting" PR stunt but remember, the ones who move stuff are the big boys (Goldman, JP Morgan, etc), not small accounts < 10 millions like us. The SEC can intervene, but not the currency market. Intervention in the currency market won't work. FX market > stock market. It's all the big players. As long as Bernanke, Geithner, and Obama are in charge, we're all better prepared for a long term decline in the US dollar. This is my absolute conviction. But overall this will be bullish for the equity market as more people find it cheaper to import American goods and thus more profit in US$ term. Although this means that the rise in stock market is just an illusion. Your purchasing power will never be the same. Unless there's something in the equation changes, there's no reason to be bullish on the dollar yet.
can someone recommend one or two ETFs to look into buying that reflect the market overall. i want to move cash into an equity index.
You should ask your financial advisor what to do. We're traders here, not a licensed investment/financial advisor. But if I were you, I'd get some foreign currencies instead of the dollar. Diversification is good. Bernanke will absolutely fail to pull his QE form the market. If he drains liquidity, there will be another crash, and Obama won't allow it. So, my assumption is he's going to fail, the US dollar is going to make a NEW LOW .. the index should fall to 71 first then 65. then 30. We're not talking about months or years from now ... we're talking about something that could happen within a few weeks from today 71 first .. Now fellows.. imagine ... MEGA BEAR RAID on the US dollar.