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I've been doing some late night reading, thinking, and analyzing. I've got some interesting things to show on Thursday. In the meantime – – and remember, I normally don't use arithmetic charts, but they do have their place – – I offer below the chart of the $INDU over the past dozen years or so………
My assertion, after looking at a graph like this, is as follows: anything who thinks we are on the cusp of a new bull market is smoking some serious weed. So there ya go.
No one can argue with a nearly 100% rise in an index in the span of eleven months. But I ask you – honestly – does this chart look like a buy to you? It seems to me a very small potential reward for a huge amount of risk.
Not to keep harping on XLU, but this is the only ETF I'm comfortable having a large short position in right now. It moves slowly, has a nice, clean stop, and is poised for a handsome breakdown. Currently I am short 10,000 XLU.
I've heard the old saying "There are old traders; there are bold traders; but there are no old, bold traders."
I'm inclined to agree. Being an aggressive bear in a market like this is a one-way ticket to the poorhouse. I have become increasingly conservative as this market has continued to explode higher. I'm a big believer in taking losses early. That has saved my skin.
The quantity of all my positions on all my portfolios, both personal and professional, numbers a mere 55 – which is almost flat for someone like me. The kind of market I'd like to find myself in is one where I've got hundreds of small positions. But there's no way on earth I'm going to get aggressive in a market like this.
Earnings announcements this week continue to be loaded with risk. When's the last time GOOG disappointed anyone? With all the lifts lately, isn't it reasonable to expect a huge double-digit price pop on GOOG as well?
I remain in a highly defensive mode. Capital preservation is job one.