Waiting To Pounce

As long time readers know I am not shy about aggressively shorting a market. If the current intermediate trend higher lasts through the end of April I believe I would get aggressively short at that point.
  • We would be heading into the seasonally weak part of the year.
  • The gigantic re-IPO of AIG is likely to be in late April, early May.
  • We will be approaching the end of QE.

3 comments:

Anonymous said...

So you really think this market can keep going on its' straight up trajectory for another 2 months?

Tsachy Mishal said...

I am not predicting this, just saying what I would do if this happened. I said "intermediate term" trend purposefully leaving room for a pullback along the way.

revelo said...

The market could easily go up for another 6 months to a year, though I'm not going to try to ride this bear-market rally. Much too dangerous for me.

What you want to look for before shorting is a peaking of inflation-hysteria, and that is still some ways off. Due to the influence of small investors, the market will continue to go up for a while after inflation-hysteria peaks, so you'll have plenty of time to act.

The inflation-hysteria will die down once some of the following events occur.

* normal weather to cool agricultural commodities.
* reduced stockpiling by the Chinese and coming online of new mines to cool copper and other metals.
* bursting housing bubbles in China, Australia and Britain.
* another European debt crisis.

We are passing through the eye of the storm right now. Japan-style low-inflation / stagnation awaits.