We’re overbought, there’s no doubt about that, so I closed my longs at the close yesterday. I can’t wrap my head around how giddy everyone is now that we’ve had a quick three day 11% rally. I can’t see us getting out of the grips of this bear that easily. Where’s my Staples button?
Yesterday, it was easy to pick any stock, go long, and book a gain. If that doesn’t worry you then you’re about to get served to the bears in my opinion. I’m not saying we’re going to go straight down, but a pullback is in order.
Scenario one: significant pop at today's open and rally till noon. Go short.
Scenario two: significant drop at the open cascading till noon. Go long.
My market timing system issued a buy signal yesterday, however I must caution you that every buy signal since August has reversed within a matter of days. One could argue that I should get a better signal. I say, it’s easier to change your perspective. Before, I would buy when I got the signal and now I’ve learned that it’s better to sell the signal. Make sense?
Maybe it will be different this time, but I’m not betting the house on it just yet. You want to know what I find curious about the media and around the blogosphere? I have not heard one peep about a retest of the lows. Isn’t that a prerequisite of a true bottom formation? All bottom-talk aside, a pullback of some magnitude should be in order, and if we continue to rise this fast and furious, then I feel this rally is doomed.
Maybe it will be easier to just stay in bed today, after all it’s unlucky number 13th….