Thursday, August 5, 2010

Sitting on the sidelines...

I am sitting on the sidelines and feeling good. Although the markets are in an up trend its too difficult to make money and the markets are making too many sharp panicky moves up and down. The "leading" stocks are not even resisting intra day declines and many are acting sloppy like IDT and IDSA yesterday.

With the T2108 above 80, many persons getting bullish in addition to the factors I outlined above; I am beginning to become more of a bear. I think many persons are forgetting that we are still poised to decline longer time. Its so foolish when I hear people say one day that the markets are in a long term down trend only to look at their blog the next day to see that they markets are now in a long term uptrend and the same thing repeating every other day.

Until I see the markets break into new 52-week high ground and many of the stocks poised to break down like Visa bounce and move to new highs; I will remain a long term bear. On the long side I am only prepared to take swing trades and even then I will not risk too much and look to take profits at 2R instead of 3R.

I will remain in cash and plan to take no positions except a position short trade I am looking to take in Visa. You can see the setup in the chart below:

Good luck and good trading!

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