A Long-Term U.S. Double Top?

3/29 - "...volatility also provides opportunities. The market's giving you the chance to buy stocks for prices substantially lower than a year ago. The question is: Do you have the courage to buy the best opportunities when they are available?"

"It's tremendously difficult to act when everyone's claiming the sky is falling. People may believe that the most lucrative time to buy is at the peak of negativity, but only a small minority have the courage to actually go through with it.

Warren Buffett is one of those people: His huge purchase of American Express (NYSE: AXP) at the height of the Salad Oil Crisis is legendary. His ability to make excellent decisions during volatile times is one of the reasons he recently became the world's richest person.

It's hard to be as levelheaded as Buffett, but there are things you can do to make your attempt easier. "

3/30 - "The same hedgie contact that so brilliantly called the last down leg in financials (see March 24 post) pinged me again on Friday. This time he had this to say:

This is probably going to challenge alot of the academic folks... but lets face it.. at least in the short term... psychology is 80% of the market volatility.

First off, I refuse to sell any of my shorts… namely SKF, SRS, TWM… But unlike the past 6 months or so I am starting to put more cash to work AGAINST my shorts."

"We shall see but my guess is that by the early summer,late spring.. we begin to realize... that things are worsening... and the wheels will start to fall off the cart again... but in the mean time… I will be getting in position for the HOPE rally."

3/26 - "Dow Theory was, as you might guess, developed from analysis (technical in nature) done by Charles Dow. Two of the basic tenets of Dow Theory are trends (up and down) and signals (buy and sell).

Mr. Dow looked to the industrials and the rails to confirm each other in order to provide buy/sell signals and to confirm up/down trends. For purposes of analyzing Dow Theory, we now look to the Dow Jones Industrial Average and the Dow Jones Transportation Average."

"All that remains for a Dow Theory buy signal is for the Industrial Average to best its February 1st closing high of 12,743. If the Industrials can overcome 12,743 on a closing basis, then a new uptrend would be in place..."

3/28 - "Investor sentiment is at its lowest since 1990 and second lowest since the American Association of Individual Investors [AAII] sentiment indicator began in 1987...Current low investor sentiment is significant because there were only six instances (excluding this one) when it was below -15%. And only two instances when it was below -20%."

"To the extent history repeats itself, the current risk/reward outlook of stock investing is heavily skewed toward rewards.

Warren Buffet put it best when he said: “Be greedy when others are fearful.“"