Allow me to share three charts with you, featuring some histrionic zealots to cheer:
What do these three charts have in common? Well, clearly, they represent something blasting higher in prices. They would capture an era of time of happiness, enthusiasm, and a sense of invincibility.
They share another important trait: every single one of them shows a market which is about to get totally wiped out. Every one of these is the S&P 500, and the charts end in years (1929, 2000, and 2007, respectively) in which bulls were about to get blowtorched. The above charts on the exact last day of the bull market.
The trick, of course, is that none of them – – not a one – – has any kinds of warning bells or shrieking harridans around it to let you know, hey, dude, time to get off this rocket ship. Sure, someone, somewhere will have shorted at the exact top, but that will be preceded by the bazillion other people who tried on all the days prior to do the same, only to get fricasseed.
For myself, I continue to focus on individual stocks which seem poised to tumble. My favorite has been, and remains, boring old Progressive, which is sporting an absolutely sensational topping pattern. This is the kind of position I’d like to hang on to for months, since it takes a long, long time for overvalued stocks to eventually grind their way down to undervalued.
At the moment, the ES, NQ, and RTY have all annoyingly returned to green, but I’m still having a decent day. Whether the ultimate top is today (umm, doubt it) or in a year, nobody knows (although if you’re from Gainesville, you can just keep relabeling the charts until you don’t have to do anymore and thus have nailed it!)
Here’s my world at the moment: nothing to cheer about, but definitely not all green!
