I use three computers and seven monitors in my trading (am I hung up on odd numbers? You better believe it; add that to the dazzling menagerie of Tim Quirks).
Two of the monitors tell me more about how my trading is going than any other – – one of them, obviously, is my positions spreadsheet, which tells me if I'm making or losing money. The other, surprisingly, isn't my giant /ES screen – it's my GDX screen. For whatever reason, the GDX is a far better barometer of my trading than anything else, even if I don't even have a GDX position. If you hid my spreadsheet from me, I could probably do a better job telling you its bottom line by looking at GDX than by looking at the /ES.
Over the past six trading sessions, I have ended the day profitably five times. The exception was Friday the 10th, mostly because I had one of my positions totally blow up on me (a short on BEC). Now here's the crazy part – – even though I was positioned mostly bearish that entire time, the market was up for 5 out of those 6 days!
To repeat – – I was bearishly positioned; the market moved up almost the entire time; and yet I was profitable each of those days except for Friday.
This tells me a couple of things; first, my bearish picks are pretty good, since they're able to survive this ongoing, sickening nonsense; and second, underneath the shiny surface of a market constantly reaching new highs, there is rot appearing beneath. (Such as whipping-boy Chipotle Mexican Grill, which dropped over 5% today, and which I am happily short).
There's more to it than this, though. Some of the staunchest bulls – who have had a terrific 2010! – have been writing me privately to tell me they think the market is about to turn downward. They are not jumping-up-and-down bears, but they are definitely saying that a meaningful drop is in the cards.
In addition, in my real life, some of the most naive, ignorant, and flat-out dumb-about-markets people that I know are just giddy over stocks right now. The NFLX of 2010 is the YHOO of 1999. Making money in the market is easy………just buy, buy, buy!
This market is still utterly treacherous for the bears. In the grand scheme of things, I consider Ben Bernanke to be the head of the biggest Ponzi scheme in human history, and as such, a traitor and criminal. These days, of course, he's a hero to most people. I disrespectfully disagree.
I personally would get seriously excited about going long stocks in a big way if the $SPX got back down to around 1150-1175. Until then, I am probably going to remain mostly short.
