Saturday, April 5, 2014

Was That The Market Top?

Honestly, I have no respect for anyone that can dare recommend investing in the US equities market. Even if you're a long term investor with a 30 year horizon, the valuations are REDONKULOUS. The only acceptable answer is a MoMo strategy with clear exit rules. In other words, trading it, not investing in it.

Why do I say so? Honestly, THIS ARTICLE says it all. The author, John Hampson, actually overlaps a lot of the websites and blogs that I follow. Am I in an echo bubble, only hearing what I want to hear and cutting out the alternative view? I don't think so. I have CNBC on now and the talking heads are saying that they "see opportunities all over the market now". I  say BS man.

So, he lists an astonishing amount of 40 different reasons why he is bearish on the US market. Much of it is largely statistical, showing how the current bull market run statistically does not have long to live. Lots of investor sentiment, breadth indicators, as well as some more questionable and non-traditional takes, such as asset class cycles and penny stock volumes.

Here are some of my favourite ones:

Citi's Panic and Euphoria Model


Rydex Bullish ratio

Margin Debt

So, those are some of my favourite charts which I think are a lot less subjective than some of his other reasons listed.

I am short the market now, and I'm comfortably sitting in profits, with stop loss well in front of breakeven now. Will I add more to my short position? I'll see how it goes.

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