Fear factor

I am sitting on heavy losses from my shorts on the FTSE S&P and DOW. Yesterday I almost threw in the towel as the market powered through the previous highs on the Dow. But then it pulled back and closed below previous highs. The close was still a local record. The situation on the S&P was not so bad, we are still well below previous highs. The big disappointment was: no spike in volume. I am waiting for a crescendo in trading. This would show that those sitting on the sidelines have finally been suckered in, and the market his at last ready to fall.

But I am  pretty close to my stop loss so the next day or so will be the end of my patience.

I am not a great one for listening to news but an item caught my attention yesterday. Alan Greenspan made a statement. You remember him, he was the guy who single handedly landed us in the s**t.  In a Bloomberg interview he said that stocks are very cheap. His argument is superficially coherent since it is based on the low PE ratios of S&P companies. I continue to believe that we have is asset price inflation generated by the the printing of money, so I continue to fear a big bust. The day will come when it becomes obvious that central banks can no longer sustain the weight of their collective borrowing and the banking system will start to unravel again. I just hope that when it happens I will be in a relatively safe place. But there is no point in being right in the long term and losing money in the short term so I will have to pay attention to my stops and find something else to do unless omething happens soon.