Market Views

Despite being long term bearish and believing that markets are vastly overvalued, I would be careful about a tiny bounce here in the stockmarkets. Markets have been down for about a week with very little bounce so far. There are a lot of reasons for the markets to go down. However, they have been ignored for quite a few months at this point, so I do not know how people would all of a sudden realize this. I am not sure what the catalyst will be for the downside to start significantly, but of course the risk is to the downside at least in the longer term. It can, also, completely break down here from a technical standpoint and we can see significant downside (I would recommend Princeton Financial for technical work - I have followed their work while I was at a hedge fund and they do a great job). However, in the short term complacency continues and we have seen good pullbacks in sectors such as steels and oil as well as precious metals related sectors. I would reduce my longs for the long term, but I would not go out on a limb to short at this point since complacency and manipulation leads the market still. Just my views for the short term which is impossible to know.