So Dow made new highs despite all the fundamentally negative views and bear cries all over the place. As mentioned on Nifty Paradox as well, a corrective move downwards is expected soon on all indices and we should be able to see that commencing in May/June 2013.
What will be the quantum of fall - that remains to be seen but definitely at a minimum, a retest of 10400 levels that was seen in October '11. At that time, the market was almost 80% + Bears and the ticker is showing exactly what is contrary to the consensus view. Now we are looking at 90%+ Bulls and in all likelihood the ticker will take the contrarian view IMHO
So those who were invested, its time to book profits and certainly not the time to buy; if one keeps looking at the fundamentals, it will be missing the whole point. As Nadeem Walayat rightly says, as long as quantitative easing and money printing keeps taking place in any form, markets will have a strong tendency to move up due to induced liquidity.
Should one prefer to hold the longs or create new longs now [the overall uptrend is almost 4.5 years old now and history suggests that 4.5 to 5 year rallies are followed by short 13-21 month corrections before starting the next leg up] one should hedge longs with 13800 Puts [3 months to 6 months forward] that are literally going by nickels and dimes on the dollar right now. 1 Long Contract would need at least 3 such Puts to hedge the risk of the portfolio.
Waiting for the 'Sell in May' syndrome to kick in.....................
What will be the quantum of fall - that remains to be seen but definitely at a minimum, a retest of 10400 levels that was seen in October '11. At that time, the market was almost 80% + Bears and the ticker is showing exactly what is contrary to the consensus view. Now we are looking at 90%+ Bulls and in all likelihood the ticker will take the contrarian view IMHO
So those who were invested, its time to book profits and certainly not the time to buy; if one keeps looking at the fundamentals, it will be missing the whole point. As Nadeem Walayat rightly says, as long as quantitative easing and money printing keeps taking place in any form, markets will have a strong tendency to move up due to induced liquidity.
Should one prefer to hold the longs or create new longs now [the overall uptrend is almost 4.5 years old now and history suggests that 4.5 to 5 year rallies are followed by short 13-21 month corrections before starting the next leg up] one should hedge longs with 13800 Puts [3 months to 6 months forward] that are literally going by nickels and dimes on the dollar right now. 1 Long Contract would need at least 3 such Puts to hedge the risk of the portfolio.
Waiting for the 'Sell in May' syndrome to kick in.....................
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