The Market: Where Short and Long Can Co-exist

Wednesday's column was about a rally within an overall decline. The two time frames - long and short - are not in agreement so right away pundits tell us that following one violates the rules of the other. It makes sense if all we do is one time frame. After all, long-term investors should not be touching a bear market, no matter what is happening.

But who is a pure long-term investor? I personally have 401K money that I rarely touch (I was heavy into cash this year, thank you, but not all cash) and I have some trading money. While I cannot trade a lot because I have to remain unemotional and objective I do like to keep some skin in the game so I stay current on market nuances.

Anyway, I am very willing to get in there and buy some stuff now, knowing that I'll be selling it before spring comes back to NY. And that is why I can be bullish when I am on record as saying there will be no true bull market for many months to come.

I'm bullish and flat. Some might say the flat counts as bearish since it is a trading range that caps off the bear market. Semantics. The point is that I have a short-term and a long-term opinion.

To read the comments in various websites following my Dow 10,000 call you would think I am evil incarnate and lobotomized at the same time. Yes, I know the economy is stinko. Yes, I know there will be more bailouts.

But guess what? The market moves to extremes in BOTH directions and the current rally is working off the extreme decline. I fully expect to be able to buy at today's prices or even lower in a few months.

C'mon, Dow! Daddy needs to buy some holiday presents.

Comments

[Big-P:]

Too much complacency boys. That dead VIX isn't a good sign and I'm going to have to get it jumping again tomorrow.

If any of you are traders as opposed to "commentors" you might do well to position yourselves on the short-side in front of two very specific periods of "selling pressure"I tomorrow.

Both time periods are listed on my BLOG but I'll list them here as well.

Expect some real nastiness into the 12:15 through 1:00 period (est) and again into 2:35 est.

2008 Dec 11 06:29 AM

[Tim Knight:]

Hi there Michael! I agree; I'm making money in BOTH directions; I've made a lot percentage-wise in some beaten-down issues by going long, and believe it or not, there are still plenty of great shorts out there. Its' a great trader's market.

2008 Dec 11 01:14 PM