The Core Concern

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It's starting to get to the point where I'm wondering if I should just go into cash and wait as many months (or years) as necessary for the market to get sane again. This is just unbearable.

I'm reminded of Abbie Hoffman's suicide note: "It's too late. We can't win. They've gotten too powerful." Surely Goldman Sachs comes to mind.

This morning, my overall positions went from a $40k profit to a $11k loss (and counting). These are "paper" profits/losses, but they are still very real. What seems to be the most fantastic opportunity for shorting in ages isn't going anywhere. The consumer confidence numbers that came in this morning were way, way below the worst projections, and yet the market is surging higher again.

If you look at the $INDU which has – incredibly – retraced 50% of its entire loss – it seems to be at the perfect place for the market to begin tumbling.

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But consider this – – – when the NASDAQ in 1999, which also seemed like an insane market, seemed to be getting "tired"…….

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It just went from insane to more insane…….. (note relative location of tinted area) and the right thing to do was to buy "parabolic" moves which seemed very risky but which turned out to be very profitable. 

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If I feel I can't trade a market using charts, then my skills aren't useful to me or anyone else. I cannot be on an emotional rollercoaster every day (Wednesday – horrible; Thursday – great; Friday – horrible, etc.). And I am not a momentum trader. Hoping that someone will buy a stock from me later at an even higher price – – – and having that as the only justification for my purchase – – – isn't my style.

At the very least, I'm certainly not opening up any new positions, and I'll just let the stops do their job. But it seems for every mile of rope the market is giving to the bulls, the bears are getting about half an inch – – and only on occasion. It's dispiriting in ways I cannot describe.