Yes, it's a pretty good summary
especially this sentence:
"The safest approach to shorting the market would be to wait for a decent decline and then sell a failed rally."
And therefore we now wait for that "decent decline" and that "failed rally." Those that thought it was beginning in mid-June but were wrong. Those that thought it was beginning in July were wrong. Those that though it was beginning the first week in August were wrong.
I've found that the people on this board whose words I respect the most are not those that sound like permabears like Fleckenstein or those who are only bullish on bear-type plays (metals, commodities, energy plays, etc) but those that instead are basically intermediate-term trend followers. Shack, Allan, jjstingray, ajtj99, and several others fall into this class. Some, if not all of them, might have longer term bearish views, but that doesn't matter to their current trading: what matters is what the market is doing now and if the market is going up, then the higher R/R ratio is in going long, regardless of longer term prospects.For how long one has a bullish bias and one what issues is, of course, up to the individual trader. But those longer term bears that stayed in cash during this rally missed out on quite a bit of potential profit making. And worse, those that injudiciously hung onto short positions lost quite a bit, and those that tried their hand at calling the top frequently had their heads handed to them.
As far as I'm concerned yesterday was only one day, and the seven straight naz down days in July was just a short time period. I'd be looking for serious trendline breaks or major moving average crossovers, with increased selling volume before I start calling the rally over. A string of O'Neil's distribution days would be significant. But until those happen, I will do only ST trades during the transition period of an IT trend change, rather that trying to call the top, which is what shorting on Friday's action amounts to. If I miss the beginning of an IT trend change, it matters not to me, as I've missed them many times before.
Before taking Fleckenstein to heart one has to remember that he almost always speaks in terms of fundamentals rather than technicals, and one can read Fleckenstein every day and he almost always has something bearish to say. If something bearish didn't happen that day he frequently takes whatever bullish things are currently happening and downplays them or tries to reframe the issue in a different timeframe or speak about the unsustainability of this or that, which is a frequently used rhetorical device. And although all of his statements might be true in context, the better question is which context should I be looking at right now - the shorter term or the longer term?
For me, right now, I still have to look at what's in front of me, which says we haven't turned yet. |
