LONG TERM INDICATORS ARE TELLING DO NOT TRUST IN SP500 BOUNCE

I do not have too much time for writing these days, but I am writing some lines cause some friends are sending me emails asking for a piece of advice.

I decided long time ago not giving any piece of advice, cause the success in the stock market belong to the advisor's friend but the faults belong to the advisor. Instead of it I use to tell my friends what I am doing, because if I do not do that, they get angry if I earn money in the stock market.

So I tell you I am in cash, today 11/03/2009. I have been shorting some times since this bear market has began, but not know, the reason is because this market situation needs to be very focus on the intraday operation.

I do not need to operate everyday cause I am not a broker, I am a speculator like most of the professional of other fields who use the market for "saving".

I am preparing for fishing and hunting, so I have the tools I will hunt in the following days shorting in the bear market and I am waiting for fishing in the basin that precede to the bull market.


Briefly I will tell you 4 reasons for not buying long yet:

1 - SP500 A-D line does not says we have a bottom yet with a probability of 85%

2 - Put/call ratio trend says probably we are going to have another down leg with a probability of 75%.

3 - The volume on the bear trend has been increasing.

4 -The 200 day moving average says we are in bear market.

The reason for not being shorting is because I want to keep my cortex focused on analysing the market and with huge intraday movements it makes me to feel uncomfortable and my amygdale takes the control. I know that this makes me to take wrong decisions.

I will short for sure but I need to decide when to start again, and that beans to find the ideal time.

Hope this helps to you. My work mates are very happy to follow my stock markets movements cause they avoided additional losses copying my strategy.

Shortly I will tell you which ETFs I use for shorting.


Here you have the absolute laws written by Dickson G Watts for speculation:

1. Never Overtrade. To take an interest larger than the capital justifies is to invite disaster. With such an interest a fluctuation in the market unnerves the operator, and his judgment becomes worthless.

2. Never "Double Up"; that is, never completely and at once reverse a position. Being "long," for instance, do not "sell out" and go as much "short." This may occasionally succeed, but is very hazardous, for should the market begin again to advance, the mind reverts to its original opinion and the speculator "covers up" and "goes long" again. Should this last change be wrong, complete demoralization ensues. The change in the original position should have been made moderately, cautiously, thus keeping the judgment clear and preserving the balance of the mind.

3. "Run Quickly," or not at all; that is to say, act promptly at the first approach of danger, but failing to do this until others see the danger, hold on or close out part of the "interest."

4. Another rule is, when doubtful, reduce the amount of the interest; for either the mind is not satisfied with the position taken, or the interest is too large for safety. One man told another that he could not sleep on account of his position in the market; his friend judiciously and laconically replied: "Sell down to a sleeping point."