Be Prudent, Not Emotional. Where You Should Be Looking To Sell
For our loyal readers you will recall our chart we have referred to as our “psychological chart of the S&P 500″. We wanted to update this chart and point this out because a few people want to know why we are not recommending getting long here.
This is our first chart in which we showed the relationship between human psychology and the market. This was back on Oct 13, we got long on Oct 3rd at 1090.
I think its prudent to take some risk off at 1288. Do I think we can break above 1300? Yes, but the Risk/Reward with irrational market behavior is not worth risking capital. If we get the ECB buying bonds, lowering rates and more austerity. We could see 1320 to 1345, but that is a lot of IF's and I think the propability is not high. We would be 100% sellers if that happens.
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