Certainly rising volatility, but I can't see that a crash is imminent. Thats not to say i'm not prepared if there is one.
The US appears to be sidewards IMO - it's a stock pickers environment where selection is important. I like the look of the semiconductors however, looking really nice. Had a play at CY (Cyprus Semiconductor Corp), real nice long.....
However, I am still new in this game, so willing to take criticism here...
Cheers
Crash? No I don't think so either.
My favoured bear scenario is an extended 70's style bear where it just drifts downward for years... like Japan.
But if playing individual names, there will always be something in a bull market, particularly in the small/mid caps.
But in the big end of town, correlation is very strong and it will be interest rates that accentuate the other negatives. And note how the market is now starting to do the job that the CB's refuse to do properly... raise interest rates. Take a look around the world treasury markets; they're tanking. And there there is a multitude balanced on the razors edge as far as interest expenses are concerned, both corporate and private. Even Bear Sterns, of all companies, has come a cropper based on the the small interest rate raises so far.
Suddenly, instead of all negative news being ignored, all positive news will be ignored as sentiment shifts.
The valuations aren't frothy enough in the US for a crash... but they are elsewhere, most notably, China.
And Guess what will happen too? Stock to borrow to sell short will be in short supply, so it will be harder to play the downside with stock. Option IV's will sky rocket making pure put buys very expensive in terms of theta/vega risk.
This will happen sometime. Whether this is the start, who knows? The market will probably rise just to make me look like a tin hatter LOL. You may be prepared, but be prepared for surprises as well.
Extreme volatility (if that is what happens)is difficult to trade. But the US market is the best place to be in terms of flexibility. The ways in which you can profit from the bear is unparalleled.
Jeez this just started out as a short two line post and now i'm waffling
Enough