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Saturday, May 3, 2014

Be cautious: the market is likly topping

Here is what I predicted on Apr 11: "...but I have a strong gut feeling that the market has reached or at least very close to its short-term bottom. Likely in the next 2 weeks, it will come back and make a big jump up. You can feel some capitulation today, which is often the feeling at the bottom." Yes, the market has exactly behaved as "instructed" and I have made some money with SSO. But I don't feel very well about it now. As I have also said, in the intermediate term, I think the market may likely experience a quite significant correction, something like 10-15% decline. May is typically a very bearish month for the stock market. Maybe very soon, probably in days, we will start to see it. Well the S&P 500 index charting is also showing a bearish head and shoulders pattern. If you want to buy some protection as insurance in case the market indeed drops like a stone, you can consider VXX or SDS, both of which will shoot up when the market is down.


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