Wednesday, May 20, 2009

Perspective ...

Being such a strong bear myself you know that I love selling myself on my views and find whatever justification I can to support my positions. So here it comes, at the expense of being completely one sided (which I try my best not to be so take this post with a grain of salt).

1) I see many traders going long here. Look over on Slope of Hope. This is not meant as a negative towards Tim. He has made more money then I can ever imagine - but his post today has a bit of an emotional tone to it.

2) Look at xtrends. I have been a reader on this blog for about 8 weeks and today was the first time he approached the market with caution and adding a more objective longer term view to the tone of "we could be going higher on the short term"

3) New Money, First trade = I just gave you $100K and today is the first day back on the market for you. I am asking you for a 30% return within 6 months. What would you do here? Regardless if you are bull or not - I am going to say you would be very careful on the long side and only hand pick specific leaders and sectors. Otherwise as an objective investor I would dare to say you would be short on the mid term before making a long term decision of direction.

4) There seems to be no end to the upside here. Even I have stated that bulls are in control - or are they? Look at volume, that to me does not look like control. Price control is there for sure but momentum and strength continues declining day after day.

So ask yourself - blue pill or red pill?


  1. samalamadingdongMay 20, 2009 at 11:48 AM

    sentiment if you look at dsi's is high but not riduculously high. can stay up around 80 for a while. still think a push to 950-1000 coming. then maybe we start to get a slow grind down. no quick selloff coming.

  2. Good points Chris, thank you. Im down quite significantly this year [lot of pain] :( but convinced were in an overall bear market rally.

    I like this guy, he takes a calm and objective look at the markets. Worth listening to when you get a minute.

  3. I am such a noob ...

    here I was trading away on the long side with great entry at the double bottom and totally forgot about the 2:00PM fed meeting.

    I was wondering what all this consolidation was there just to get 2 big down bars taking me out of my day trade long. Either way was a great hedge against my core short positions. Still would have liked to take home the gains I had there as I went in pretty heavy on the long side.

  4. I agree with you Chris. Shorts at this level have better shot at making money than the longs. I too got stopped out from long but not unhappy about it.