Monday, November 16, 2009

Quicknote (scaling back, keeping neutral)

Unfortunately, I no longer remain an idiot.

It could be worse. I could have been so clever as to be fully short coming into today. I was leaning in that direction up to Friday (in aggressive accounts at least), but I was just stupid enough to neutralize on Friday's ever-bear-trap drop. Futures accounts aside, today has not been so nasty as a result.

Futures have been nasty today, yes.

Going forward, it is going to get interesting, or so I suspect. But my discipline forces me to shrink in spite of my hunger to get busy and make up for being on the wrong side of the tape. I can't self-destruct much from sidelines. The major component necessary for me to get involved (and importantly, to stay involved) is I need to be gaining first (making money) and out-performing second. When that fails, I shrink into a ball, climb a sacred mountain, club a nursing seal pup, or any and everything necessary for me to right my head and be poised to strike again.

For what it's worth, this is my suspicion: Time-wise - we're getting close to an important turn (either from up-to-down or else up-to-sideways, in terms of the major trend). Price-wise - it could get more dramatic (still!) or it could end with today's close; I'm not in the business to predict. Target-wise - a shift downward may not be so extreme (I'm not shouting any Dow Jonestown clarion calls here). There are enough negative divergences to cause concern, but I'll prefer to monitor the health of everything as we decline and decide then whether or not to load up long for the end of the year; or else focus short instead, should the world come undone.

If we just drives higher before driving still higher still - I'll have to come in long again; and hopefully sooner rather than later.

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