I almost always sell too early and rarely hold on too long. My natural inclination is to want to take profits on my longs into the most recent rally. However, when I examined many of my indicators this morning I wondered if I were long enough.
Over the past two days Rydex traders have actually increased their short positions. Despite the large rally off the bottom Rydex traders remain positioned extremely bearishly. Bearishness from participants in the Investor's Intelligence survey, Hulbert newsletter writers and hedge fund managers has risen even as the market has risen. This is usually extremely bullish. Imagine where the market would go if all of these participants tried to move back to neutral at the same time.
I have heard that the primary bid in the market has been from share repurchases. Once corporations repurchase shares they do not sell them back, at least not right away. This corporate buying does not seem to be letting up.
We have had a large move higher in the market and the situation in Europe has not gotten better. I will likely force myself to make some small sales if the rally continues but I will be doing so half heartedly.