Uncomfortable Feeling

Some time ago, I promised that I would become bullish on the stock market once again. Today I added to my position on the close and now I am at my longest equity exposure this year. To be exact, I am long SPX (now below 1300 avg) and I expect this to be a core holding in my portfolio. I have to say that I am extremely uncomfortable in this position, due to marginal breach below 200 dma. But if traders did what was comfortable all the time, they would probably not trade for a living at all. This is a contrarian trade, and many of my followers are probably not agreeing with me. Heck, a part of me is not agreeing with myself as I type this.

Why am I getting longer here? I, who was a grizzly bear above 1400 on SPX, and said that this market is frothy and will sell off hard. I was short then, when many said "decoupled SPX is heading to 1500 or even higher". And now I do not want to be with those (probably the same people) who are screaming that "the world is about to end". This is simply silly, they are now selling what they thought (just a month ago) was the best asset to have among all asset classes - SPX. Today they all woke up and realized that decoupling was just a myth. Fine, let me have their SPX pukings, even if I have to wait for a while to be vindicated.

So it is with great trepidation that I would like to announce an official bull on this blog. I may be totally out of my mind: China, Europe, Brazil, Australia, India, and now U.S. - are all slowing down. But folks, I knew this 10% or 144 SPX points higher. Am I going to panic now, when everyone else just decided to pay their lazy attention to this??

Do not sell the lows, do not panic... If you want to go to the sidelines, that's fine, but do not sell the lows, please. Now, nobody knows where the lows are, but they are heck of a lot closer to here than 144 SPX points above.

With so many negatives surrounding today's decline, let's quickly address a few positives: Dow Transports did not make a new low, Nasdaq 100 is still above 200 dma, and momentum indicators are not confirming lower low in price on S&P 500.

click on chart to enlarge