As far as the techs are concerned, I see a bullish trend in communication only. Semis, software and computers are struggling, except for the leaders. So it's not true that we are at the height of the bull market. Also, companies recently doing business overseas (China etc) are expanding at a good pace and barring international drama or disasters, they should be doing fine. The Dow somehow does affect all stocks, although techs seem to be forming thier own character lately. I dont think a top has been reached yet. A top is when cats and dogs rise rapidly for no apparent reason. If you could buy anything and make money, it's an indication that the bull market is ending and bear market is begining. IDID and ZE for example. But they corrected and died down, so can we take them as omens? How about RDUS? Worst fundamentals, yet it kept on rising. The signs are there.
Cyclical stocks may be the best for long term shorting. Take a look at Borland's chart. Great for option play? I have never shorted long term, so I'm a novice at this.
Btw, Why I said wait for a momentum stock to rise more than 100% is for a non-technical reason. Most traders are likely to get out when they double thier money in a few days. It could start falling much before, or rise much above. But in more than 90% of the cases, you can safely short at a price above the high of the third day without fear of losing much money.
Since post election years are the best bear years, I think bears are waiting until year end to come out of hibernation. Lets see what happens.
Cadaver |
