What we end up with is a grotesque monster that does not resemble anything in the known universe.
Every right-minded investor knows in the back of their mind that this cannot last.
But while it does last, why not make a profit?
I know many of you are strong bears, even perma bears. However, you need to go big as a bear at the right time or it begins to hurt quickly.
I reserve the right to change from a bull to a bear is the drop of a hat, so don’t be surprised if I change. And you should too, being flexible is key to profits.
What I share here are my thought processes, I do not want or expect anyone to take my advice, make your own mind up what to do with your money.
Technical Analysis & Thoughts
The ISLAND TOP – in , this is a serious concern for a major direction change because it depicts the battle between extreme bulls and bears. In this case, the bears won. I guess the feds massive purchasing of Index ETFs, stabilized everything again.
The mauling of the markets on June 11th was huge, although the market has recovered , but this is an important sign. In a normal pullback, 5% loss in a week indicates a serious reversal. I have backtested this back to 1920. This was greater that 5% in a day, a serious shock. Another 1 or 2 of these shocks will be the end of this Goldilocks recovery.
Confidence is everything and we are all feeling very itchy.
ADR is still very positive, the up days are excellent, freakish really, but they are weakening.
RSI and KST are not telling us too much.
@Mystrybox pointed out that pyjama investors / Ma and Pa investors are pouring into the market, and even the Economist magazine mentioned it this week. A sure sign of a bubble if I ever saw one.
You expect it, I expect it, the right-thinking rebel alliance of bears see an unsustainable market.
But in the short-term, I am long and making money until Mr. Market tells me to move to cash and short.
Watch out for drops of more than 5% in a week as a tell-tale early signal of a significant move down.
Stay safe traders/investors.
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