Wednesday, April 14, 2010

Feels Too Good!!!

The 5sma of the equity only put/call ratio just hit a 3 year low, and the PPO(5,50) did as well. This is extreme bullishness. It doesn't mean the rally is over tomorrow, but it is a major warning sign. In particular, it is telling us that the 5th ( or (A) ) wave may be in its final stages. Certainly this is not a time to be adding short term long positions, but rather, selling them.

I did buy VSEA on a breakout today, but I already had the order in place for the last few days. I will probably sell it tomorrow or Friday.

This type of market makes you believe you can do no wrong. This type of market lulls you into complacency. This type of market gets you to overcommit, and then pulls the rug out from under your feet. Watch out!

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