Bert Dohmen is Bearish

Bert Dohmen was on financial sense last week and made a pretty good argument for a big correction. Here is some copy from his web site.

OUR CURRENT VIEW, by Bert Dohmen (March-1-2011):

The weight of the evidence suggests that a rally top has been made for the near term. As active traders and investors, we would not go bargain hunting too early. If the 1295 level on the S&P 500 holds, there could be another bounce. If it’s penetrated on a closing basis, watch out below.

For a good bottom, you must see real concern amongst investors, followed by genuine fear. That will take some time to develop. We will keep our valued subscribers to the trading services (SMARTE TRADE for stocks, and the FEARLESS INDEX & ETF TRADER for ETFs) informed on virtually a daily basis. There will be excellent trading opportunities, both long and short.

THE SHORT TERM : Excerpt from the WELLINGTON LETTER Feb.28 issue

On Feb. 23, we wrote: The character of the market has now changed to the bearish side: rallies on low volume, followed by declines on high volume. The consensus of analysts in the media is that this is a bargain hunting opportunity. Yes, we should have a bounce, but it may be brief and weak. That will be followed by a steeper decline. We don’t want to go looking for bargains.

Remember, in October last year we wrote about “a change in the character of the market.” We noted that stocks rallied even on the worst news. That gave a tipoff to the upcoming market rally. Now we are starting to see the first signs of a change to the opposite. But such transitions don’t occur from one day to the next.