Which state of the market psychological cycle are you at?
Euphoria? (Extreme financial risk)
or
Denial? (Continued upside)
I feel that it is still at Euphoria.
The economic problems aren’t gone yet. The homebuilder sentiment has forewarned us about the bad housing starts figure that will be released tomorrow.
However, the stock market roared almost 2 minutes after that 10am report was released today. Unbelievable.
What caused today’s rally? The weakness of the US dollar? Obama speech (nothing spectacular, except empty self praise)? Or the anticipation of tomorrow’s fed outlook?
Or was it the good earnings of Lennar?
Theres really no reason. We have seen 2 bad news, and the market jumped on them.
Is this called buying the disaster? And buying the news? And keep buying? This is really euphoria.
While I was neutral biased yesterday, I think I am moving more to the bearish side now.
Short LVS, FCX, SNDK.
Long BAC, AA, X (at lower prices)
Keeping the trading strategy simple by monitoring fewer stocks.
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