Is Your Parachute Ready?

Are you ready for 300 points fall of S&P 500 in the next 3months? or more? At least that is what Bob Janjuah of Royal Bak of scotland thinks. According to him –

“A very nasty period is soon to be upon us – be prepared”. He further stresses that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

And as the outlook is grim, and so is the timing. It created shockwave amongst the “learned” ones and it’s “hot of the press” news in almost every financial portal. Bob became a star after his grim warnings last year about the credit crisis proved all too accurate.

Let me remind you this famous quote-

“Ignore the past and you will lose an eye. Live in the past and you will lose both of them.” -Friedrich Nietzsche

There was another bearish outlook by Morgan Stanley some days ago. I think his timing couldn’t have been better. It’s after the rights issue of RBS and oh yeah, haven’t we been seeing marketing falling apart by nearly 1,000 points or so in past few weeks. Every now and then, we’ll hear some prominent or not so prominent analyst will come with bullish or bearing predictions and someone gotta be right and “that one” will be star. Be prepared, ah that’s the best message anyone can give. But how as an individual you can prepare? Stay on sidelines and remain in cash. Not bad either.

Keep your parachute ready? are you ready for a fall? I am not. I am not ready for a sudden fall that might happen overnight and if I don’t have time to react by the time market opens the next morning. I am ready for a slow and steady fall, even though there are “dead cat bounce” along the way.

I shall share my thoughts soon, meanwhile why not share your thoughts how do you want to protect against the fall, if any,

Profitable trading, OP





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