It is mean reversion time again. This week will again see a high magnitude bounce to frustrate the bears. Those late to the bearish party and those just about perfecting their short strategies will again get a good lesson on why it is tough trading the bear markets. Unless you have overwhelming conviction and stomach to withstand high volatility on short positions you should not short.
Update: The hate mail keeps coming. Again lot of traders are spooked by the bounce and the viciousness of moves without volume. The mails range from "I was expecting a crash on Monday" to saying its all manipulated by Fed, Bush etc.
Most new to the market do not understand the dynamics of shorting. If you must short then you must be very early or very late.
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