What is to be done

spshapiro said: TJ, what we are discussing here is the virtue of different methods, not specific investments.  What I believe is relevant is that we a similar rhythm to this market, and have seen a way to exploit it rather than bemoan it.

Seems to me, that's what TJ's talking....making light of my silliness in market timing, but I've had a point all along, a strategy based on it.

You may recall myself and Owl, back as far as three years ago, talking about the comparison to now and the 1965-1982 range-bound market, which also synchs with the 17 year cyclical bear/bull theory.

One of my barometers was the premise that DOW 14,000 was massively overvalued similarly to the Dow's repeated roof @ 1,000 from '65 to '82 - based on credit driven consumption and valuations based on MBS derivatives, combined with the zenith in consumer & government debt, as well as wages and unemployment, it doesn't take rocket scientist to conclude an economy will stagnate without wages to support consumption, regardless how good corporate earnings are, if those earnings aren't reciprocal in the form of jobs or other trickle down, it's not sustainable.

Simply put, until we see serious change on the fiscal, tax and foreign trade front, this market is range-bound, left completely dependent on the Fed to attempt to placate the short comings of Congress & the Senate.

This is where I'd have an "I told ya so" for Owl, who felt that monetary policy alone could cure all ills.

When Jim Cramer devotes the first half hour of his show to explaining to his viewers the impact of the credit situation in Europe...well...

How about this from the NY Times:

http://www.nytimes.com/2011/11/29/business/businesses-scramble-as-credit-tightens-in-europe.html?_r=1&hp

Why aren't Europe's banks lending?  Could part of it be because they are being force fed their own countries sovereign bonds:

http://online.wsj.com/article/SB10001424052970204753404577066431341281676.html?mod=WSJ_hp_MIDDLETopStories

The situation is already beyond repair. 

Play the range?  Okay.  Buy high yielders?  Maybe. 

In my opinion there will be a day (or a series of days) when the equity markets capitulate to Europe due to a catalyst like Italy defaulting or Germany leaving the euro.  That's a better day to be a buyer.

Let me just say, you guys look at options and index options in a VERY inefficient manner. There are better ways to look at them and understanding how to trade them in this market, much less in general. I LOVE the 1-3% intraday market movements. It makes my job of making money easier at the end of the day. Markets follow very specific patterns on a daily basis. The way to use your money at this point is to trade intra-day with a POSSIBLE of holding a little overnight, or to buy up stock and then sit on it for the long haul. There is no middle ground and believing otherwise is not exactly what I would call bright.

I would suggest to EVERYONE here to go and stop trading real money and go for some paper trading for a few days and do HEAVY paper trading to understand the market better at current times. Keep futures graphs up and watch how they change over the day and start picking out the patterns and correlations between your favorite stocks and market indexes. Then play the patterns with real money, as they are fairly consistent. Technicals mean VERY little at current times. You're better off following patterns and fundamentals. I ran with technicals for the past 6 weeks (up to mid-Nov) and lost so much money. I'm now following fundamentals (for the past two weeks) and coming out with solid gains each day (not always big, for example today I put up $1880 with commissions and came out with $30 profits, partly my fault for not trading my Netflix puts off earlier for an extra $160).