LOL! But that's far too simple and logical for people who think they need to jump through hoops and get all stressed up just to make an easy profit. Simple is trading in the direction of the trend. Hard is trading against the trend. Now, why is that a difficult concept! Duh.
If you want one SIMPLE reason why the market is unlikely to roll over, it's because we're in an environment where weakness is met with new buying. There is a LOT of cash waiting to get in on weakness, and you see that repeatedly whenever good stocks, or market indexes, begin to offer buying opportunities. Now, if you want to fight this extremely strong buying sentiment, you do so at your peril. But I suggest you just stop fighting and give yourself up to a GREAT time to trade the long side.
I don't feel like digging through threads but about each time someone discusses a top, there are a few people calling them stupid and a few others saying it's possible and that they're flat
Why? COMPX is down 26 today, Dow down 50-60. Traders tend to go with where the market's going. Today it's been down so far. And that's where it's been easier to make money.
Obviously you're bullish; like lots of people. The fact that bullish sentiment is higher than back in early 2000 doesn't raise any concerns? People back in late 1999 and early 2000 continued to chase the market too .. and some are probably still hurting from their losses. Sure there may be a lot of money flowing into the market, as there often is in January ... but there's always a lot of dumb money out there too ... people chasing to get on board long after the train's left the station. The time to buy was 6-9 months ago. Valuations at this point aren't too attractive (at least to me). Right now I expect more volatility and thus, more opportunity intra-day.
So you're going to look at a daily chart of the S&P and tell me what? That it is in a downtrend? There is absolutely NOTHING in that chart to suggest that we are ready for a major correction. Further, I suggest there is nothing in the economy, there is nothing politically, there is nothing internationally, there is nothing technically. Absolutely everything is aligned to suggest continued strength. Certainly, a few days of weakness can come up, and I personally hope they do so I can get in a few trades. But anything more is very unlikely in the near term.
In 2000 right before the downturn of the market, almost noone was trying to short. In fact, people looked at you like u were crazy if u wanted to short. Very very different now. Half the traders constantly try to short individual stocks and indexes. Then they cover and get hurt.
It's not clear to me how you can rationally arrive at that belief. How do you measure when the shorts are "squeezed out"? That's a measure of discomfort and how do you know? Is short interest diminishing?