Tuesday, May 10, 2011

This time it will be different......

That's what the bears think each time the market pulls back. Surely there are more fundamental reasons for the market to fall rather than rise. This time it will be different......except that it hasn't been different for over a year now. Each pullback has been followed by newer highs, in most cases V-shaped rallies. Make no mistake, there will come a time when it really will be different, when the market will undergo a long period of correction. It will happen. But if you go on shorting each pullback in anticipation of this correction you are just going to seriously damage your account. You have got to respect what the bulls have done for over the past year. Odd favor going long in case of a pullback. And if at that pullback, it does turn out to be different, then the worst that happens is that you get stopped out for a small loss. If it is really THE correction, you will get ample time to go to the short side. Just stop trying to catch the entire move and calling the "top" every time.

Take care and good luck!

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