hehe this guy is catching on. This crash all you shorts keep hoping for cannot happen because you all have to cover.
I did not say everyone, just the idiot traders that keep trying to force shorts onto buyers in their feeble attempt to drop the market. There are tons of them. I dont even trade ES, I trade NYSE and I made my money and was done before 2pm. To be honest, I do not like depending on Fed announcements to make money. Plus, by the time you know what the real direction is, it's too late. All the real shorts were established before 2pm.
An alternate theory is this: Since everyone remembers what happened in the first bubble (i.e., people holding onto stocks no matter what), this time around everyone will have stops in place this time. All of these stops will cause a downward cascade in the market.
I find that there are always a ton of people out there that fail to figure out when the game has changed, and as a result, they bottom-pick all the way down ( like in the 2nd half of 2000 ) and they also short the market all the way up. They refrain from using simple technical analysis tools like moving averages to DEFINE the trend, and they fight it every step of the way. As to your real question: I would suggest that there is a ton of money out there that has been propelling this market in the typical seasonal fashion - - - nothing surprising here with mutual fund cash inflows. The Economy is doing well, interest rates are coming off of 40 year lows, and inflation is neutral. Sure there are shorts in the market on the way up, just as their are fresh longs entering the market on the way down. The key for the trader is to figure out and define the trend. Many people let their EGOS get in the way of a very simple motto: The Trend is Your Friend. We are merely shaking the Tree of some longs here. No big deal. . . Follow your moving averages and just trade 'em!
Just individual stocks during the day. Whenever there are buyers, at least half the sellers are shorts. In some stocks I trade on a consistent basis I've seen just 100s of thousands of shorts established. Then days later the stocks are a few points higher. It's just funny to me that traders are dying to short all these stocks, but why? And these are big orders we are talking about, not some intraday 1000 share lots. You can also check out put/call ratios on various big stocks and indexes. That really just tells you the overall sentiment. Im not sure how much that is really of an indicator cause u never know whether it's dumb or smart money.
Ok but how would that be any different from 2000? Sell orders are sell orders. Only difference nowdays is that we got short covers and quite a lot of them.
As of today, has merely retraced 50% of the upmove that started in early December. ( 42.10 ) Great support appears a bit lower, at 41.20 - 41.40 This is important, because this group loves to be the first that Bulls and various fund managers pile into due to the high Betas!
Not just him, but a number of others also exhibit the same attitudes. Clearly most people on ET seem to be bullish and seem to vent at anyone who even mentions the word "short". Thus, I go about my business quietly (i.e. short the past 2 days). Some (bullish) guy yesterday twisted a (short oriented) post of mine so I figure it's easier to just trade than answer some of the perpetual bulls. Then again, I suspect a lot of these guys are buy & hold types and not intra-day traders.
I don't know if anyone realizes, but we've just given back all the gains since the 2nd trading day of the year in 2 sessions (QQQ). The key thing I'm learning about shorting is patience -- bottom pickers usually get proven right or wrong quite quickly after entry, but top pickers often see their profitable shorts go flat or negative many times before they finally take the big move lower.