Short Term Strength vs. Long Term Weakness

I wish I could had a better read on where the markets are heading today, but to be honest, it’s a coin flip. You’re basically pitting short term strength against long term weakness and right about now I can see a strong case for either to win. I would lean a little bit more on the bear side right now as it seems like we’re ready to start a new leg down as we’ve stalled near RSI 60, but this market has a tendency to whipsaw. I would be careful about getting too short crazy and scale into new positions as the market provides decent entry points.

Yesterday, I scaled back my short ETFs 50% and will let the rest run emotion free, setting stops at my entry points.

Comments

[pacman1947:]

Jeff,
You may want to try butterfly spreads if you want to play, but cash is better for old codgers like me.

Long term, this market is poised for a tremendous fall -- perhaps greater than that of the Crash of '29 through '32. There are far too many signs of weakness in the fundamentals of too many nations and what once were invincible companies. I do not see strength in the bailout babies. To many, hundreds of trillions of derivatives with no underlying value are not toxic assets -- they are fraud.

Short term, the market will whipsaw, but these are the tremors of a dying animal after it has been shot.

Mar 31 08:35 AM

[Crude Oil T...:]

Any one who does not have short positions on is missing an opportunity of a life time. Why is it that people only say that during bull markets and the moves up. We will be in this bear market for years, you must learn to trade it. Why do you think FAZ is so popular, a lot of wealth will be built taking advantage of the future and current bank failures. Why do "you" have to sit on the sidelines?






stock-market-club.blog...

Mar 31 10:17 AM

[AndrewBaker:]

Looking at both the charts and the fundamentals, it's hard to find a reason for the recent bull phase, other than a dead cat bounce built on the hot air of politicians, financiers and other interested commentators. I agree with pacman1947, that this market has yet to hit the bottom. All that's been done so far is just moving out in time the final drop and extending the time it takes to recover to many many years. It's a short term investing game right now, either shorts or selected long stocks to sell back into the next rally. And/Or sit it out with some cash to buy in when the real bottom hits. Wait for it.

Mar 31 04:35 PM