I hope everyone had a very nice holiday.
LT, I think your bearish scenario is becoming more likely each day, and those that regret listening to you, were actually quite wise to listen. However, collectively, we probably should have had the wisdom to see that more was happening here then the expected bounce. We should have been prepared to go long when the surprise rate cut was announced.
For those doing some soul-searching right now, be careful not to teach yourselves "lessons" that could cost you capital in the future. This is a highly unusual time - any doubts about whether we are in an equity bubble should be cast aside ASAP. The craziness won't be over until nearly everyone has been humbled at one time or another. Look at those who have held long through all of this, they have learned that they never need to sell. They are doomed.
The question is and remains one of timing. One of these days, weeks, or months it will happen. Will it be a double top? If so, there is money to be made on the short side. If not, there is more money to be made on the long side.
Since short-term movements are likely to continue to be strong in one direction or the other, we should carefully monitor short-term indicators.
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