Roger, you have my permission to short at will tomorrow (conditionally - see below).
The Dow reversed intraday today, and closed right on the top of the trend channel (it has been playing outside of the fence now for several days). Combined with over-bought levels in nearly everthing, the next few days *could* be ugly.
If it moves down tomorrow, say, 50 points or more, today could, in fact, could, in fact prove to be "the" top. (I think that if the Dow closes down at least 50 points tomorrow, it is much more likely to close down 200 points. That is, it won't close down just 50 - it will be up, sideways, or down 200.)
However, I still expect the top to take many months to put in. If the Dow is "saved" tomorrow, look for much more upside. If the Dow gets significantly inside the trend channel, I beleive that it is over. I don't expect that, but, if it does...
While it's usually not a good idea to short good companies, tomorrow might be the day. I think I would avoid the inflated PE high-flyers that are favored here, because money will go to strange places trying to make back losses, and there could be some scarey rallys in these stocks.
INTC and MSFT may be your best bets on the short side.
The likes of SUNW and QNTM might be good as well - good values, low PEs, but have really gotten ahead of themselves. Shareholders in these stocks have been trained to not expect much. I think they may take their windfall profits.
Read the threads, and you will see that nobody expected these levels a month ago, and anyone suggesting prices like these was branded a looney and dangerous. I called for SUNW to run to 40 and was told it might make it there by the end of the year... |
