Invincible

The dips are becoming shallower and shallower and if I had to sum up sentiment in a sentence it would be "is it even possible for this market to go down". Shorts are capitulating as are underinvested longs looking for a pullback.  I'm guessing that the monster move in Apple today means that retail investors are getting in on the act as well.

These are not the ideal conditions to be investing in. I would even argue that the risk/reward is negative. Despite my negativity I am still maintaining a small net long position. Valuations are still reasonable and people became very bearish this Summer so there is more room than usual for the market to get extended as these people come back.

While I would not be shocked to see further gains these are not the types of situations I like to invest in. If we get more extended I plan to continue selling. Have a good night.

2 comments:

Anonymous said...

I have been reading your posts once in a while. You are an academic, very smart guy and not a trader. Interesting to see you have not been assertive about this trend...

Tsachy Mishal said...

Thanks. I'm not certain what you are saying.