HedgeFundLIVE.com – Last month I wrote a blog about when I would be willing to get short this market. At the time of writing that blog, the market was still on a tear and at overbought levels. Everyone and his brother knew the market was long due for a pullback. Trading, though, is all about timing. When I wrote my blog in mid February, I said that I wasn’t willing to jump over to the short side just yet.
When would be the time to get short then? I believed it would be when the market starts to struggle at a level for a few days and when there is a real and visible battle between the bulls and bears for at least several days. My reasoning was that historically corrections following 52 week highs tend to be preceded by this type of action. Looking at the market over the past couple of weeks, we’ve been witnessing a great deal of back and forth action between the bulls and bears.
Gains made over a couple of days are erased by the subsequent day or two. This type of struggle in the market is what I had been waiting for before getting short and now that it is happening, I will put myself out there and say it is time- to short this market. A bit of inspiration from Howard Marks of Oaktree Capital in his year in review letter, if you are afraid to short here:
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