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Investor Sentiment: Tough To Be Bearish
It
is tough to be bearish for the following reasons: 1) the overwhelming consensus
opinion of investors, bloggers, and newsletter writers is bullish now and into
2011; 2) the perception amongst investors is that the Federal Reserve
has back stopped the market; 3) there is a persistence to the tape as it
marches higher on both good and bad news; and 4) it is the holiday season where
thinly traded markets can be easily manipulated higher. Yes, it is tough
being bearish when everyone and everything you read is bullish, and the equity
market can only go one way -- up. Yet, here I write that I am
bearish. Why?
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How about taking the 3rd position of any trader.
Wait, just simply wait. I see the reports on how amazing people see this market, sure I'll bite if there is soemthign to buy. But don't give me jazz hands on this about how amazing the show is yet.
First, there is no volume, so getting stuck in a trade is a very real possibility. Going long and holding long, fuck no. Three market crashes in my trading life time and we all see the exact same thing, people getting hurt.
Second, Stock pricing seriously doesn't make anysense. We are back to irrational and over exhuberent buying...again. But thankfully the retail buyers aren't going to pony for the show anymore. Only guys playing have a server rack trading against another server rack.
Third, Oil will increase so will food by proxy. I am still convinced all the last crash needed was the Canadian dollar at 1.10 to cause $140 a barrel and insane food pricing. Like an elastic band being pulled to far it snapped and that was that.
Fourth, inability of any government to stay solvent. None of this matters if there is no gate keeper.
However, feel free to go long but keep the stops in place to CYA.
The Fed has bakstopped the market, but only for those THEY care about, the big banks and random other crooks. No one else counts.
Being part of the "no one else counts" catagory, I believe that the only way to win is to not play ... not to buy and hold fraud.
Yeah, I think this is definitely a "starve the beast" situation. Whether you are long or short, you're supporting an evil system. This includes buying physical PM's (do your homework on who's profiting from your purchases). Literally the only way we're going to free ourselves from this shit is to:
1. Produce only what you absolutely need to survive.
2. Consume only what you absolutely need to survive.
The less we contribute to the production and consumption of goods and services, the more we free ourselves from their slavery.
+1 Thomason
Im loading VXX
Remember tomorrow full moon and bradley model changes (Monday next turning point)
I do agree that time is limited for the bull market. I ran across the article below and after reading it I think his reasoning is way off base even though its overall speculation would be inline with the topic of this thread.
This article below seems to think all commodities will react the same way as the dollor changes value against other currencies which is utter BS. Way too many variables in almost any commodity to just believe a change in the dollor will cause it to rise or fall in value.
http://www.businessweek.com/news/2010-12-20/commodities-falter-in-curren...
Bullish, eh? I was gonna buy some call options on VIX a few months out, because I am sure crash and burn is coming. Then I looked at the costs of VIX call and put options, and practically fell over from the shock. Freaking call options (betting VIX will rise) cost a freaking fortune, even many, many points away from the current VIX level. In contrast, put options (betting VIX will fall) cost nearly nothing at just about any level. Totally freaking insane! This means everyone who trades these suckers is totally convinced smooth sailing is NOT ahead... as in "bearish as hell".
So if you're someone who believes the [bunch of] bull story, you can make a freaking fortune buying VIX puts. Fact is, they're so freaking absurdly cheap, even those of us who believe bad stuff is coming should probably buy some, just for the hell of it.
Bottom line: VIX is screaming BEARISH at the top of its lungs.
Tyler, Cdad, and many others would agree with you, I think.
edit:
http://www.zerohedge.com/article/vix-contango-piledrives-levels-last-pre-market-peak-levels
http://www.zerohedge.com/article/and-whoosh
So, do we still have 80 days to party?
The AAII has been above 49% bullish for 3 straight weeks. The last time that happened was early October 2007.
Complacency and overconfidence, not a good mix for the markets.
Easy to be bearish when fraud and manipulation are the fundemental drivers of said bull market.... I said.
Because buy and hold worked so well for the past decade?
Long term bulls are still underwater, and the structural problems that sank them are worse today than they were a decade ago.
Performance since '08 is still classified as a short term bounce, and it's still below the market highs. You want to get bullish into that? LOL.
+1
not really hard to be bearish here. everyone is too bullish, goldbugs included. here were my reasons: insider selling at all time high, chinese imports signal double dip, Baltic Dry Index broke 2000 per tyler. i went short ES and EUR on friday...
asian markets down big, SSEC at -2.84%, Bangladesh -6.74 on front of ZH
http://finance.yahoo.com/q?s=000001.SS