Tuesday, March 13, 2007

Bulls Have Gone Into Hibernation

It's not going to look pretty for the bulls.

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The market moves in cycles. Welcome to the bearish part of the cycle as indicated by the bpcompq. Next stop is a drop to the 45 level at least. More likely we will see a drop below 38. That usually takes a few months of selling to get there, unless we get a major toilet flush in the next few days.
Although the most profitable shorts were made in the initial plunge almost 2 weeks ago, I think that there's still money to be made on the short side, but once the bpcompq drops down to the 45 level or below, the low risk setups will become increasingly hard to find. In fact, at that point, we'll likely see many market pundits calling for a bottom.
So, in other words, now is the time to strike while the iron is hot.

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