Thursday, January 26, 2012

“Enjoyed the ride my love, but……”


‘My Dear Love,
   I am always fascinated by your beauty, your wildness and the pleasures you offer. We had great times together and we partied hard several times.  The parties were great but the hangover and after effects were terrible. I am still nursing the injuries sustained from last year’s after party crashing.
  Your manager, Bernanke is trying his best to continue the party by offering free alcohol and free Viagra (low interest rates and more stimulus), and keeping every ones attention away from the smoke, coming from the European block down the road. The music is getting louder and party is getting is wilder. All the alarms, in form of overbought indicators are going off, warning me to exit. I fully understand, the party can go on for extended period, but I enjoyed the ride, had enough fun, and don’t want to crash after the party.
  Please understand that this is only a temporary separation and I can resist your temptation only for so long. I will find my way back as soon as Relative Strength Index drops below 30. Wish you all the best and don’t worry about the house because I am buying insurance with puts.
Your lover in separation …RK’
  
  Oooh! I am glad; I got that off my chestJ. I feel the markets are too hot to stay invested as a trader in short term. I have liquidated most of my positions, to move 85% of portfolio into cash. I plan to buy put spreads or put ratio spreads if the markets continue to stay overbought in near future.

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