LVL - First I should state that I'm really talking about tech here, i.e. Naz issues.
Not to belabor the point, but shorts are outnumbered in the markets 50 to 1. And there's a lot less motivation to short a Naz 2000 than a Naz 5250, although I know not everyone looks at it that way.
Lots of amateurs out there to be sure, but lots of managed accounts as well, and those have the much higher asset:J6P ratio. Those FMs are the guys predominantly wheeling the stocks around.
This isn't about FA right or wrong or even TA right or wrong, it's about capital flows. Keep pouring money into even a falling market and it will rise back up sooner or later, it can't help it. Whether J6P gets scared out in the meantime and buys back in later at the top isn't my point.
Granted that we have already witnessed a great deal of the foregoing phenomenon with the run to Dow 10K etc., but I don't believe that the game is over. Your presence and mine, along with the many others on this thread, should offer some evidence of that.
Sideways consolidations on decreasing volumes can also wear people down. IMO there doesn't have to be another crushing bear wipeout for things to right themselves, just the elapse of time will accomplish the same workout.
Short term traders could care less, but swings need to pay attention and position traders absolutely have to. Things may look real chitty on paper at the moment, but it seems to me that there are forces at work here that have no intention of letting this thing collapse.
That means if you're trading from the short side, you dang well better be a daytrader and a good stock "unpicker", because longer term the bias is against you, at least until your described early retiree unwinding starts to pick up steam. But that's 10+ years away.
I suppose you could argue that the real collapse can come when even my mysterious forces finally give it up, but if that were to happen, we'll be living in caves. I can't plan and still take that possibility into account, or I'd never do anything. It's outside the box.
Do you really believe we've seen the SPX top for this generation? I don't. |
