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Amazing levity of being stupid #Markets

Guys who have followed me for sometime know I am bearish on stocks but not short. Thats a critical difference. You cannot take on the Central Banks and live rich to tell the tale. My cash positions are highest and for the longest duration that I know of. And yes, broker hates me. 

The markets have been totally ridiculous off late. Ridiculous in terms of its move compared to the underlying macros and growth prospects. The levity is purely coming from the liquidity, on an ever drying basis.

The fuel required for the drift down are all present - right from the incompetent government, to sagging corporate profits, to lower growth, to higher inflation, to low growth expectations on failed monsoons, sticky interest rates etc but nothing seems to dent the cloak of bulls. Markets have been stubbornly steady on lower volumes and participation. I am not sure why it should not stay that way for some more time.

But there is one factor that scares the bears out of me. Everybody in the street is bearish. Everybody. I hate it when my train is crowded. I like to travel alone - up or down. And the worst is we have not even left the station. Frankly, this scares the hell out of me than any other factor. Markets are simply not going to fall as long as people are bearish. August expiry is an excellent example of how narrowly we manage to stay above the levels. I want to see people becoming bullish and giving me a target of 5600, 5800 or 6000 before I begin to short the futures. Until then shorts is nothing but hoping something will go wrong in US or Europe or Center. 

One prop trader asked me then why dont I buy? First, I dont trade counter trends. Second, I like the tail wind macros than the head wind. Third, I remember 2008 the year when the ever flowing liquidity dried up wrecking havoc.

This is the time, present and future, to protect your capital. Not make money out of it. Trends will generate itself, just make sure you are not stuck on the wrong side of it.

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