While settling down to put my thoughts about the market on wordpress I came across this article by Stephen Tetreault on Financial Sense that does such a good job of expressing my thoughts, I’m going to recommend it and point out some highlights I especially like. I, like the auther have opened some 2x leveraged etf’s on the short side in an attempt to capture what I believe should be some decent profit taking in the next few days.
I’m also struggling to decide if this is a tradeable rally as I am seeing some improved technicals in my indicators and if the market wasn’t so incredibly overbought and in need of a rest, I probably would be advocating going long here.
we are extremely overbought on multiple time frames and a correction is very overdue…markets do not lift off 15-20% in a matter of a few days on less than average volume with out getting exhausted. As such I believe that this up-trend could be-near and exhaustion state and that we could start to see some new near-term bearishness ….
This recent bounce has undoubtedly pulled many new-bulls (I call them bag-holders) back into the fray, please be cautious and do not get sucked into a long-position without being very careful and using some hedging vehicles….we need to see follow thru and some decent volume (which has been sorely acting of late)….
Remember folks never forget the power of greed and fear, and the propensity for investors wanting to own stocks (taking long-side) remember there are usually 4-5-bulls (participants) to every bearish investor, so the propensity for bullishness is almost always stronger!
..this is a massive 21.9% relief rally (technically we are in a bull-market now as we have gained over 20% from the near-term bottom….remember I said technically)…I have stated many times that bear-market relief rallies are swift and abrupt and this 7-day run sure has led-up to its reputation…
I’m completely honest when I say I really don’t fully understand everything that is going on with all this government intervention and I’m just trying to make sense and trade the trend, but it’s very difficult when the rules of the game continue to change daily. I find it terribly disturbing when the media jokes about how the Fed are ramping up their printing presses and printing money at unprecedented rates. This is in no way in the best, long-term interest of the citizens in America and somebody should question the legality of what’s going on in Washington. By my count, the government should be bankrupt with the spending spree they’ve been on lately. I wish money grew on my trees as they apparently do on the lawns of Washington.
