If your time frame is 1-month, I believe covering the short may be prudent, as there is likely a 2% additional upside going into early June.
If your time frame is 2-4 months, I believe holding the short is prudent, as I see about 4% downside from this level over that time frame.
If your time frame is the calendar year 2007, I see about 7-9% upside from here, depending on the index, so I believe covering the short would be prudent in that case.
If your time frame is until end of 2008, I see us testing the 2006 lows in the end of 2008, or about a 25% haircut from here.
In my view, the 2-4 month and 19-month time frames favor remaining short, while the other time frames would favor covering.
All in my opinion. You may recall I have also had a long term plan for my employee's funds, and that included remaining long until the end of 2007. We have been long since late last summer after selling in early 2006. That plan says cash or short for about 12 out of 14 months going into Feb. 2009.
I have no opinions on the various interworkings of the market. I only have my expectations formed by reliable and repeating historic chart patterns. This has worked for me, but everyone must use what brings them both comfort and profit. |
