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I must say, I wish I could be having more fun given the run the market has had over the past eight trading sessions. Right now, trading this market is like going out to party with girls who were the AP Physics types in high school. You feel like you are ready to have fun, you’re out on the town, but there is something off about the whole predicament as you are partying with a bunch of pompous dorks. To be aggressively long right now in this market is akin to partying with those nerds.
Rather than aggressively riding the rally, or stubbornly averaging into short positions the whole way up, I am playing defense. Mind you, I am not playing Buddy Ryan type of defense, where I push the offense BACK three yards every play. No, I am playing the bend-but-don’t-break defense, with a heavy cash position and some select longs, along with $SRS as a hedge.
We are now at the very top of the multi-month trading range. Although many are anxious to call for a top here, and are cherry picking certain aspects of the price action to support their desire for an imminent reversal, I am seeing no such evidence yet. If this, indeed, is going to be a a major inflection point where we rip out of the range up to 1150 or 1160, then I will first and foremost not get caught in the tide. Beyond that, I am admitting my willingness to miss out on some of the profits on the long side, until I see better entry points into less extended charts.
well put chess. i am 100% cash right now and as much as this market is trying to entice me , i will remain on the sidelines until we break out or fall back into the range. Good to know I am not the only one 🙂
my prediction – island reversal tmrw morning when best buy reports.
Interesting scenario, thnx.
Chess, Dunno where you went to school. We only had hot female physicists. Engineers & CS too (well mostly). They’re prolly all working at GOOG now.
Only had hot female physicists? What was the name of that porno?
Love the buddy ryan comment…
regards
chuck
too bad Jerome Brown died, the Eagles defense of the late 90s was unreal. Also, Randall Cunningham screwed up the team a lot too.
The most entertaining season was when the Eagles had T.O., much to their chagrin. They just hate having superstar receivers.
It just so happens I pioneered the creation of AP Physics II and AP Chemistry II in our high school and of the 10 or so in that Physics class, none were women. I was the only one who took both. In college it was important to befriend communications or marketing majors as they are usually the hottest. Go figure post-college I end up with a woman who has a doctorate in the sciences.
Many analysts are bearish on all companies surrounding PC demand, but memory chips are the leading industry today according to finviz which makes if feel like the tail wagging the dog. In the macro aspect financials are the leading sector, which is healthy. There is alot of economic data this week which will show that businesses have been building inventories and it will have the undertones of bearishness, but we shall see how the market reacts. I’m positioned cautiously long right now. Sold a bunch of winners today.
great post.