Today's action on the back of Fed's decision to inflate the Treasury bubble even more is very instructive. I am impressed with the participation level of the crowd, and that the presence of so many people on the long side of the market (see the volume on today's trade) is bound to attract more people. The avalanche is coming and only very bad news now can stop this train. I remain long with much more conviction. There are some short term technical hurdles of 50-day moving average (kind of meaningless number used by some people) and about 900 on SP500 (a more meaningful number called resistance) coming soon. It appears that 50-day moving average will be passed easily with this many people convinced that bear is now done with for at least another 1000 Dow points and the worst crisis is over. I am not sure about whether Dow will make that far in this rally or what will become of the current crisis since I do not trade on these kinds of pie-in-the-sky expectations and I do not make any such predictions. I only look at what other people are doing in the market at the moment albeit one day late. My stop loss order now is profitable even with -5% of today's SP500.
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