Friday, September 7, 2012

Just Be Quiet!

An official STFU is in order to myself. I have been too preoccupied with the negatives and missed a simple fact - there are too many traders like me out there, who are too negative on everything. We (shorts) worry about world-wide economic collapse, intelligently digest every piece of new negative data, try to predict the next protracted downturn in corporate earnings, identify every non-confirming fundamental and technical signal, which should stop the rally - all with complete dismay, as the market demolishes our positions and takes out our stops. We underestimate the will and power of our politicians, central bankers, and CEOs to prop up the market any possible way they can. This is the time to yield to two longs, who have more money than all shorts combined - ECB's Mario and Fed's Ben. Preserve the capital and live to fight another day - the rules of trading survival. I will remain quiet for the time being, as the ideas in my head are still the same - this rally is the result of CB's liquidity infusion, and is highly suspect due to lack of many fundamental and technical underpinnings.

1 comment:

  1. Hi, I can sympathise entirely.

    Yet, surely you still agree that the entire run since the 2009 lows have been one of delusion, inspired in part by the lies/ignorance of the clown media, the politicos, and the paper printing of the central banks.

    Re: liquidity infusions.

    As a few of the greats out there note, the problem is NOT one of liquidity, but one of national solvency. They can throw all the money they like at the banks, but it won't matter.

    The recent LTRO'2 is without question a complete failure, aside from the fact it helped prop up equity prices.

    I myself am mostly sitting on the sidelines. There are opportunities to short, but they are brief and the down cycles very minor. Whilst the weekly and monthly cycles are both trending up, for any normal person, short-trades are too risky.

    At some point, it will turn, and it will be hellish. I don't look forward to what will eventually come. It'll make the 2008 collapse wave seem like a Disneyland tea party.

    Indeed, as you note, it is VITAL to focus on preserving capital right now. We could melt up for..months...maybe most of next year!

    Sp'1600, 1700 ?

    Its a viable scenario. Just imagine if we're at those kinda crazy levels, it will be like 2007 again, and those with capital to short, who will be ready to ride the next collapse wave lower, will be the trading kings and queens of the 2020s.

    What has kept me going is focusing on the bigger trends, and keeping in mind the fact that this whole thing will unravel at some point.

    Have a good weekend.