In yesterday's post, I said that investors were starting to hope that the worst is over. I think traders / investors are starting to fear that the worst is over. The smart money seems to think that, although things are fine medium-term, we are due for some more short-term pain. In Macro Man's lingo, this is the "W" correction. There will be another leg down, and it should be bought. But investors are worried there may not be another leg down, and so they are trying to decide if they should jump back in or wait.
It is tough to know how to play this knowledge. I am a contrarian by nature, which gives two possible options: 1) there will not be another leg down, and this rally should be bought, or 2) the next leg down should be sold.
The fundamentals (as discussed in past posts) point towards option (2), and the fundamentals should rarely be ignored. But, as always, it is important to remain aware that I might be wrong, and I may need to change my mind. For now, the TSX is below the target range for the upward retracement, and I will watch and wait.
MARKET POSITION: SHORT (4 units)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment