Traps and the bullish conspiracy

Half the battle on bullish or bearish side is avoiding the traps. The traps are well timed to inflict maximum pain.Last Monday was a trap for unsuspecting bulls, who got scare of their life once they came back from holiday. Similarly today some over eager shorts are feeling the pain. More than the pain, some of them will have their confidence shaken.

One of the advantage of writing the blog is I get to see some of the newsletters, 5-6 reader whom I interact on regular basis through email keep sending me copies of some of the newsletters they subscribe to. This weekend most of the newsletters were negative. Some newsletters had urgent alerts mid week asking followers to go short. The blogger sentiment poll yet again is negative. Prominent bears were publicly stating they are short at this level.One prominent blogger was hinting at Monday crash.

Now readers of my blog know my views on the market and I repeated same thing to those who emailed some of these newsletter and asked for my opinion. My advise is always think twice before going short based on technicals alone. As it is shorting is a difficult art, on top of that when things look so obvious always be ready for the trap.

As I have said before, when everyone and his mother-in-law is looking at double top, MACD, support break, cycle top, candle patterns, newsletter sentiments etc.,and comparing the markets to 1929, you find this obvious actions at such "technical trap points". Most of the times these are technical traps. Lot of people who follow such voodoo science take positions based on their indicators and then the market traps them. That is why you will see many breakouts/breakdowns happening at such technical trap zones. That is also the reason, so many of the same people believe in the conspiracy theory.

Now if you were ready with your buying list, there were some good opportunities today. I have put some capital to work for some quick bucks. Here is what I have positions in or monitoring on the long side.

AGR,Agere Systems
BVX,Bovie Medical Systems
BYD,Boyd Gaming Corp
COGO,Comtech Group Inc
CSLR,Consulier Engineering
DLIA,dELiA*s Inc
GHCI,Genesis Healthcare Corp
GOOG,Google
ISIS,Isis Pharmaceuticals Inc
KYPH,Kyphon Inc
LNDC,Landec Corporation
MEL,Mellon Financial Corp
MIKR,Mikron Infrared Inc
OPWV,Openwave Systems Inc
PPC,Pilgrim's Pride Corp
SEPR,Sepracor Inc
STEC,Simple Technology Inc
STN,Station Casinos Inc
TTWO,Take-Two Intera Software
WYNN,Wynn Resorts Ltd
ZOLL,Zoll Medical Corporation

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2 comments:

walter said...: "As I have said before, when everyone and his mother-in-law is looking at double top, MACD, support break, cycle top, candle patterns, newsletter sentiments etc.,and comparing the markets to 1929, you find this obvious actions at such "technical trap points."

isnt everyone also looking at breakouts too? i guess good volume is the key...; Dec 4, 2006, 12:47:00 PM
Pradeep Bonde said...: Earnings is the key. As long as earnings do not decelerate, the market will have bid. The elephants care about the earnings.; Dec 4, 2006, 1:07:00 PM

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