Skippy Stone

Sucker's Rally Approaching an End

On Apr 13 08:30 AM somecatchyphrase wrote:

> The author offers an excellent summation of the recent rally. Thank
> you.
>
> Nothing has changed in the past five weeks to justify a 25% rally.
> Despite all of the media coverage, it seems like many people don't
> yet appreciate the depth or gravity of the world economic situation.
>
>
> This could create a wonderful shorting opportunity. I'll keep my
> power dry and finger on trigger. The next month could prove to be
> very interesting.

Ha. EVERYTHING has changed. But, I see many are going to stay in their bear caves.

I guess the bears don't want to see that the banks around the world are being saved. Financial institutions are increasing deposits and the consumer (good and bad) are reducing debt. There are going to be negative numbers for another nine months. But much of that information will indicate what happened in 2008.

Now, let's pay attention to some obvious trading technicals:

A: The market is NOT up 20+ %. Use a one year high and a one year low, divide that in half, and tell me what ya' got. It ain't a 20% rise, is it?

B: Recent action indicates a trend up, not a trend down. If it was a bear trap, the biggest movers up would see a 25% retrace, immediately. This is not happening.

C: VIX. If you follow this indicator, then you see nothing but bullish bias. This thing could not get below 40 for months and months. Now, it doesn't want to go above 40. That should tell you something.

D: Trailing big caps: Many of the most familiar U.S. corporation have not even begun to really recover. It will only take one quarter of FLAT news to send these stocks soaring back to ONE HALF of their value last year.

If you want to remain pessimistic, please short some of my favorite long term plays. I will love squeezing the heck out of you little negative teddies.