Perception is currently pushing the major indexes higher.Bullish sentiment is 66% and doesnt show any signs of weakening in the near term.Until that bullish sentiment subsides ,shorting to the extreme could be elevating your risk level to the extreme.Throw out the technical and historical data,charts and any other indicators you may be using,because in this respect,perception and perception alone will rule the major indexes.I would equate your position to fighting the fed,its like beating your head against a brick wall and in all likelyhood you'll loose because the wall rarely looses.Brokerboy made an excellent point ,in just catching part of the move.Its been my own experience that trying to time a trend shift is next to impossible and have probably suffered my worst losses over the past 20 plus years in trying to do so.Make sure you have a bulletproof exit plan.I just had my best year ever and did it by following trends already in place.You can make very good money without exposing yourself to so much risk.Last but not least,always remember that greed is a double edged sword,it can make all your dreams come true,or it can just as easily become your worst nightmare. Goodluck
My guess is that the consensus is going to be completely wrong this year: 1.) Inflation is alive, Deflation is dead. 2.) Higher long-bond yields as the Economy continues strong. 3.) The Fed won't let the market down during an Election Year. Studies have shown that a fibonacci 78.6% retracement in the Dow Jones Industrial Average of the first leg down in a huge bear market is not uncommon. It happened in 1937 before a big downturn, and it happened in 1968 before a big downturn. A 78.6% retracement of the downmove in 2000 in the Dow Jones would take the Dow back up to 10,770. The trend is definitely your friend, and the trend is still up. But don't be surprised if 2004 sees global equity and commodity markets rollover to the downside in a major way at some point during the year.