A diary of the thought process behind my investment decisions
If the bear side were over-crowded we would not be treading water so close to the lows of this move for 26 hours now.We are certainly overdue for a mini-squeeze higher but I would be surprised if we got through 1055-60 on the e-minis. I just don't think the market is that short. As I've said many times before, the bears were slaughtered over the course of the March '09 -April '10 rally. They still talk very tough but the positions are smaller and they are much quicker to take profits these days. Just my opinion and observation.
Bull side is more crowded. Most of the short term traders seem to be looking for a bounce to 1060-1070 and then a continued selloff. I am thinking a continued selloff then a bounce to 1070.
I'm inclined to agree with the two previous comments. Call buying is back up to pretty high levels and other short term indicators are moving into neutral to bearish levels as we go sideways.Once again the market is showing a bearish character where sideways is bearish and bounces are only enough to reset short term sentiment and other internals.Maybe we end up falling off the cliff on the open tomorrow, busting through that 1040 level finally and getting a big woosh lower to really get a tradeable bottom of sorts.
Most of the fast money crew are bearish...I'm sure that makes tsachy bullish!Anyhow, they reiterated what i pointed out yesterday and today.First the s&p closed below 1050 for the first time this year and also it continues to make lower lows. Until that is broken with some higher highs and higher lows we are heading down.Sell into gains.
In the medium and long term the leading indicators rule the stock market. Nowadays they are point do the down side. Technical analysis and a sentiment stance are important to time the market but if someone restrict to them is like to wear an eye patch.
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