Tuesday, June 1, 2010

The tide has turned

Today, I believe, was the day when after over a year, the baton from the bulls back to the bears. Now you readers might ask why today of all the days?? We have had much worse days in the recent past and the bulls are getting their asses kicked for a month now. So, what made today different? Here is the answer dear readers. All the big down days in the past, there was a smell of panic associated with the selling. There was always news in the background or the fear of some approaching news. The panic was due to Greece woes, contagion fears, a drop that for which we still have no concrete reason etc etc. But there was almost always some fear associated. But that's where today was different. Today, the market was supposed to gap down and stay low due to weak PMIs from China and Europe. The futures were way down for most of the night. But the bulls were allowed to come back. And they stayed in front for most of the day. Or rather, with the benefit of hindsight, we can say that they were allowed to stay in front. The bulls were actually toyed with. They were suckered into believing that they were in charge and then they were calmly and expertly dismantled. There was no panic. No fear. And that's what made today different, and thus important, my dear readers. I believe buy on dips, which has worked so well for over a year, is finally over now. There will be rallies, obviously, but these rallies will be sold into. I am still not comfortable going short though, as a lot of charts are already beaten down a lot. I am going to wait for low volume pullbacks. But being short is where the money is now. Don't let the market make a sucker out of you. Be careful dear readers, be very careful.

I am not going to be blogging for the rest of the trading week as I have too much going in my life right now and more important matters to take care of. I am mostly in cash, having disposed of most of my longs in the morning.

Take care and good luck. I will be back this weekend.

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