Sunday, August 2, 2009

Overbought, Overdone, Outragious, but truly Amazing.

On the last post We covered some reasons why the market should fail. So far it has not. Bears are licking their teeth jumping at every turn and then having to cover the next day. I think the soup Nazi said it best " NO Shorts for You, Next!" So now we have the market making new highs on light volume trading, typical summer action, and the market is showing truly how amazing it is. The thing that makes the market such a work of art is all of the styles of trading are rewarded at some point. Think about it for a moment and bask in the glow of it's greatness. Shorts were in vogue for all of the year for 2008, longs brave enough to take the plunge have been rewarded for their conviction since March of 2009. Swing traders as of late are in a euphoric state as their picks seem to do no wrong and slight pullbacks are easily manageable. Even the Day Trader is seeing constant action as the market seems to be a little more mechanical in it's nature. The market is sometimes made out to be this mystic monster that is ruthless cold and only good at taking investors money while quickly escorting them out the door with a smile saying "comeback again when you have more money to play." This to me is why one must always study the past of the markets to understand it's purpose. The market is a well oiled machine that makes fortunes and plunders accounts on a daily basis. So as we are now starting to get comfortable with the market again, keep your eye on the radar for a pullback is due but not in the magnitude we just felt 7 months ago. The line in the pirates of the Caribbean should become the battle cry for all investors. "Take What ye can! Give nothin' back!"