After rallying for an unholy number of months it appears that the market have at last begin the process of a top...
I know too that many of you bears have heard this before. What has confused all of us, or at least myself has been the moving averages... all thru this I kept stepping back from the aquarium... that is I kept looking at longer data series, -not years but decades.
Start looking at weekly bars not dailies... you will find an excelent chart in this months short report...http://www.theshortreport.com
When you look at the market from 1971-2003, you see the whole drama before you... the terrible oil shock and bear of 73-74 and the parabolic everybody-in-the-pool top of 1999. Insiders became heavy sellers of equities right into 2000, -just as in recent months they have once again been selling with both fists (32 to 1 by recent estimates).
Many have wondered in recent months whether what has occured was the beginning of a new bull market... and I will reiterate that I do not believe it is so. I believe that what we have seen is the last gasps of air leaving a dying bulls nostrils... pity the bull he is dying and sadly enough will so much of the optimism that we have seen... as we reenter the downtrend... this rally reminds me of the scene in the movie the perfect storm right as George Clooney and the boys of the Andrea Gale enter the eye of the hurricane thinking they are alright and they might just make it... -right before they are back in and then they know they are doomed...
The next leg down in the market when it begins has the potential to create an economic storm of proportions most of us only know from movies like "The Grapes of Wrath"...
This will likely begin from this area...
*** If you have been toying with longs, it is now time in my opinion to make all haste and exit all longs
If you are short I think most of the pain has already been realized...
Now is probably a very excelent time to sell short in my humble opinion.
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