I have that feeling too as a bear. Using reverse psychology is fun... Yeah, I have no shame in admitting a DOW market top at 12,500 and bought way too much DXD(1000 shares). That 20 something straight up days killed me. We'll never get that as bears and can only hope for a REAL significant sell off. Mark October 17th off on you calender. The sooner we get out of the 13k range, the better. I don't want to see new all time high's for a long time.
Summer. Big boyz made their killin' for the year. And my chart says the fat lady is warming up. Down till fall. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1498956
market will be held up till fall. Then the situation will be revaluated. Lot of the selling your seeing is from 'fear', the same news only moves the market so many times. Eventually it looses impact. This week is expected to be volatile. The key is what is done when key events are over, the FED wont do anything next meeting and everyone knows it. So the risk is the shorts have to cover before the meeting. Plus the week after is nonfarm payrolls, so price will come back to equilibrium which is around 1520 in spooz. One short covering rally takes us up 15 points back to equilibrium and then a follow through day another 10 to 15 points which risks the stops of the long term shorts at the highs. A correction is usually successive, means once it starts it unwinds pretty fast. The fact we still held up in the trading range, the price has a probability of springing back. If you look at the last fear cycle in bonds, yields only moved up marginally when the peak was breached. Now we are close to that marginal point now based on previous peak.
SiSe...when you said:Raise looking more likely here too. Bernanke should have no unease about raising rates. One thing is certain, his wording at the next meeting will certainly be more bearish for markets than it's been. I have to agree that a raise is more likely than a cut. I am one of those out of step with the mainstream, and one who has maintained that the Fed really will have no choice but to support the dollar, as Fed policy will ultimately be driven by the need to finance the deficit. US rates must be competitive and we see a rash of interest rate raises around the world. We are coming off the largest increases in liquidity in the last 50 years or so. Consequently it is reasonable, from my "out-of-step-with the-mainstream" viewpoint, to think that the market reaction will be correspondingly large. What i may not be taking into account is the influence of new money coming into the US markets from our trading partners. We are more then ever a world market, and i'm not very sure at all what that's to mean. Iv'e been in this racket for over 40 years and seeing some odd behavior in the markets this past few months. For example the extraordinary long period of up markets without visiting the 20MA. And also the markets total disregard for any bad news. If you go back ten years, you wouldn't see this to the extent you now do. I may be totally wrong, but one thing i've learned is it is far better to miss out on a profit then suffer a big loss. I was out at the market open on the day of the first big drop, and happily so. Still trading intraday of course. Lots of money to be made there either way.
You're not looking globally in my opinion. Japan, NZ, China, England, all raising rates or looking at doing so. Carry trades, markets already up so much this year, etc. etc. I already know a few guys who retired from the tech boom and they've taken their money off the market in the past few weeks and said what's the point in trying to eke out another 5% this year? The fed is going to be looking at raising rates in my opinion and it could be a surprise raise. But his tone will likely be changing at meetings and in public. I think everyone is in for a rude awakening because if debt gets pricier as it likely will from NZ, Japan, etc. companies will be in a world of hurt. No more cheap money to use to buy back shares and boost earnings. I don't see how you can say that a short covering rally this, a short covering rally that...your whole hope is based on short covering now? That's grasping in my opinion...you remind me of stktrdr when he said "the shorts can't push it any lower" as if the only person who would dare sell is someone shorting. Good luck.
I'm looking back throughout the 80's 90's and post 2000, noone knows where it will stop falling. But when intermediate term fear sets into the marketplace, those have been the best times for position additions for long term holders. If you still believe in the long term trend, you pick a point and place a stop. And thats pretty much what anyone can do.
The markets in general are harder to understand due to derivatives and carry trades. Don't even get started with computers buying and selling. I'm reading "When Genius Failed" right now and it really goes to show you how things can end up with the complex deals that are made to make profits and hang on to them. Time will tell but I sensed a larger trend toward selling today in the spurts and buyers backed the hell away from the line when the sellers would step in.
Spectra..those have been the best times for position additions for long term holders. Sure, but the first order of business is always to covert your paper gains into realized profit. You must protect your gains and not chance them being wiped away by a down market.