Talk of a market top led to a classic bear trap this morning. After some mixed economic data, the market opened weak and struggled to bounce as the dip-buyers hesitated for a while. It looked like we might have a downtrend day in store, and the bears were feeling fairly confident with the idea that the market was ready for the big reversal. However, at around midday the dip-buyers slowly started to inch in, and before you knew it, they were pushing us back into positive territory, and the squeeze was on.
I suspect that we had "weak" shorts piling in this morning, looking for the quick downside trade, and they were easily squeezed when we reversed back up. In theory, the idea of shorting this lofty market with lousy fundamentals sounds pretty good, but in practice there are just too many persistent buyers who are ready to jump in on minor pullbacks.
Market trends tend to be stubborn things, and this one particularly so. The market has done little wrong other than stay stronger for much longer than many folks thought possible. Unfortunately, a good shorting opportunity just isn't that easy.
Many are itching and scratching to embrace the dark side but I'm still looking for some negative price action to show me that the time is right. What we saw today supported the bulls yet again.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment