For the past few months, I have been writing very few posts…but almost everyone of them is negative.  I’ve even mentioned the word crash a few times and threw in a picture of some dummies to provide some subliminal messages.   Meanwhile, the market has continued higher.   So as you might expect, I’ve gotten my share of emails and calls asking me if I’d care to retract my negative comments or at least admit how wrong I have been.

I’ve heard this stuff before…the last time was in 2006 and the first half of 2007 (read through my archives).  Back then, some kind-hearted people told me that they were worried for my mental health because I was living in denial about how great things were and that being so negative would lead me into clinical depression (if I wasn’t already there.)   I was not offended, though I was slightly amused.

The answer to the questions about retracting my pessimistic commentary is the same answer as always and it’s really short…. “NO”.   First of all, please take a look at my performance on over 3000 stocks this year, or last year or for that matter, any year since this site first appeared in 2005.  I don’t need someone else to ridicule me into changing my mind, I can do that just fine on my own.  Regardless of my personal opinion, the signals at HEDGEfolios are a reflection of what I believe the rest of the market thinks and will do….not what I think it should be doing.   So along the way over the ups and downs of the past 5 years, I have changed my mind (on my own) based upon all the analysis I do.   Listening to people telling me that I need to cheer up or get more positive has never made me more positive and neither has it made me any more negative than I already was.

Since I was unwilling to give into the hecklers, as a concession, I’ve been asked to explain my position in detail.   I don’t need to do that.   I’ve done enough explaining on this site and I doubt it has done any of us much good.   After all the correct predictions I have made over the years, you either believe I know what I am doing or you don’t.

So rather than repeating the rationales that I wrote over the past 4 years, I’ll just give you a few hints about why I have never been so negative about the stock market.   Please search my archives for “Expected Value” (just click here).   I’ve never had a lower expected value calculation for the market than I do now.   On a technical basis, I am looking at approximately 1000 stocks that have either no support levels or very weak support levels anywhere within a 38-50% retracement range off the most recent rally (with quite a few having no support for 75-100% retracements).   I’ll give you two charts that are the poster children of what I am looking at  GOOG and AAPL.   Go through the charts on the 3000+ other stocks I cover and you’ll see what I mean…you won’t be seeing double, or triple….there are many hundreds of charts that all look the same.   As for fundamentals…at least the way I do them, this is the most overvalued market I have seen since starting this site.

I recognize that there is an abundance of happy talk experts telling you exactly the opposite of what I am saying and they might even be willing to show you fancy charts and figures that will likely impress far more than my plain comments.   Go with whatever works for you.   Unless there is an exogenous shock, I’d be surprised if we get a negative reversal before the new year.   After that, it’s only a matter of time.    In my opinion,  there is a high probability of a significant negative market event.