Well, I passed. (YES!) I appreciate all your kind wishes; they worked!
I only have a few minutes, but I wanted to break my pledge about no post until Saturday. I am, if nothing else, consistent.
And I'll use just one graph to make a point – CROX, of all things.
There are two big points I want to make using the above graph as the basis:
ONE – While enjoying the ride up, one must always be cautious about when the music is going to stop playing. I bought CROX at March 26th at $1.2158 and sold it on May 5th for $3.66. Why did I get out? I felt the cluster of trading activity from last year around $4.00 was formidable, and I wanted to make my substantial profits. The stock pushed a little higher, but, as you can see, it's back to $2.52 now.
The point is this: it has been almost impossible to lose money buying stocks over the past two months, but at some point, there's going to be a softening, especially with these high-fliers. Multi-hundred percent gains are great in the span of two months, but at some point profits are going to be taken. So at a minimum it pays to keep your stops very fresh (although a day like today woudln't have saved many CROX owners).
TWO– the most bullish thing this market could get would be a hefty retracement next week. Take a look at OIH, for example. Am I a buyer here? Absolutely not! Would I be a buyer at $90. Yes, yes, yes! Indeed, a chart resembling CROX on quite a few more important issues (like OIH, DBC, and the like) would be astonishingly attractive.
At this point, the market's retracement is on the side of a milk carton. It has gone missing, and no one knows if it'll ever be found again. We are in our ninth straight week of this insanity.
I'll say one other thing – – – the confidence regained by the bulls virtually ensures the retracement will be nothing more than just a retracement. In other words, a buying opportunity. I do not anticipate any Big Kahuna plunge to return for many months. We have to get to a level of conceit and confidence among the bulls equal to what we saw in October 2007. Until then, my plan is (a) cover shorts/sell puts upon the completion of any decent retracement (b) load up on the best-looking long opportunities I can find.
