Some of this and that

As you know, I've been advocating a sell longs into strength and high cash position strategy for the next few months as we wait to see how all the current issues in the market play out and to get clues as to whether we are seeing a consolidation phase here in the market or if it's something more ominous. I believe it will turn out to be the former but I'll look for clues from the market to confirm.

I gotta tell you though, the media, both financial and mainstreet,  is certainty doing it's part to try to convince you to stay out of the market. I've been seeing a lot of doom and gloom articles out there. In late June the cover of Time magazine was this

you can read the story here. The best contrarian indicators for the stock market come from Main street media.
Remember what I always say about contrarian indicators.....they are the most effective when they are against the current trend of the stock market. The stock market has been in a solid bull trend for over 2 years and so bearish articles like this are indeed strong contrarian indicators.It just so happened that this article came out right at the latest ST bottom in June...that doesn't always happen and so you should not use such indicators as precise timing  tools.

I read the weekly commentary from noted bears Hussman and Mauldin both whom of which I respect but don't always agree with. They paint quite a hopeless picture for the US as I see with many other "experts" out there. There are bulls out there too no doubt, but there's just as many bears if not more.

But let me tell you something about the bears. They have been dead wrong about this bull market....as wrong as you can be. Many of them like Hussman missed out on the entire 100% rally or even worse bet against it. And the thing about these bears is that despite being horrendously wrong about the market don't you find that they have shown little humility? Don't you find that the bears are just as bold as they were 2.5 years ago near the beginning of the bull run? Such lack of humility when they have been embarrassingly wrong about the the market is a sign that they have not been humbled enough IMO. I find that most bears have way bigger egos than bulls and are far too self righteous and dogmatic. They think they are are always right and the market is always wrong when it goes against them no matter how much or for how long it goes against them. The "I'm not wrong just early" excuse is no way to play this game.  It's quite possible the bears will end up indeed being proven right in due time but in my eyes they are already wrong no matter what happens because if you listened to these bears (aside from the gold bug bears) you would have lost so much money betting against stocks. If you simply just sat in cash the entire time, it's unacceptable as well because missing out on a 100% stock market bull run is a massively wasited opportunity.

Do you guys remember how it was during the depths of the crash? Anyone bullish was humbled to the point of silence while being ridiculed from others. Do you remember Cramer getting roasted on the Daily Show? That happened on March 12, 2009 right smack dab at the bear market bottom. How many bullish gurus did you see angrily wringing their fist like bears are doing now saying "Just you wait and see! There's a huge reversal coming....I'm not wrong I'm just early!" That folks is what you see at major turning points....when those who have been wrong are finally humbled, silenced and are  no longer taken seriously by the media. Have the bears reached this point....not by long shot.

Alright then despite all I said, I've been siding somewhat with the bears just for the time being. The main reason being that market action no longer suggests we are in the type of bull run that we saw from September-March and as one who's sitting on some nice profitable positions, it make no sense for me to press these bets and so I've been cashing out... but.not entirely mind you.

Notice that we are getting a lot more days where the market is up or down 1% +. That's not bull market behavior....that's bear market/consolidation behavior. This is the exact same type of action we saw last summer. Therefore, even as a believer that the bull market is not over, I show respect towards this  non-bullish action by maintaining a high cash balance. Despite my longer term bullish convictions, I defer to the market action which is telling me "not yet" or possibly "you're wrong". Respect the market folks or it will beat it out of you.

The best market advances i..e the ones that are the most powerful and sustainable usually don't give you an ideal entry point if you missed the bottom....if forces you to chase if you want it as the market doesn't give much in the way of pullbacks. Just take a look at the September low as an example. Now, take a look at the latest market action. We got quite a pullback from last week giving you a good opportunity to get in if you missed the rally from late June. That to me says that you should beware of such an opportunity unless you're a ST trader. I for one will not get involved with ST trading especially during this environment of highly elevated headline risk which makes the market seem like a roulette wheel.

I continue to maintain a 30-70% split between stocks and cash. My method of investing is often the equivalent of watching grass grow. There could be several weeks or even months when my account balance doesn't move much in the other direction....then things can exciting for a week or 2 only to go back to boring for several weeks again. A lot of people out who trade crave excitement and attempt to capture every wiggle of the market. These people are no better than sports gamblers in my opinion. Don't get me wrong......what I do is also gambling but I like to think of it as gambling with an edge. Time will tell if I'm no better than the typical sports gambler.