It's just a matter of degree or specifically the degree to which the risk vs. reward ratio at any given time makes me lean one way or the other. But there is always risk and there is always potential reward.
I got a little polite criticism from a blog reader last week claiming that my bearish attitude caused me to miss the rally. Au contraire sir. Not only did the portfolios outperform the broad market in 2009, but the most recent rally was managed as well. Hammer time, as they say.
But it doesn't change the risk environment which stinks right now for broad stocks, even as the Dow targets higher levels. NFTRH71 (pdf) was put out just as hammer reversals were showing up all around in February. Back then, all the sentiment tools (literal and figurative) like individual investors, investment managers and newsletter writers were way too bullish; extreme even. In bi-polar fashion they came off this condition with a thud. Now?
Anyway, 71's available as a sample if you want to check it out over here. (Edit) I think I need a vacation. What I meant to say is the sentiment indicators were way too bullish heading into the correction early in the year and then quickly flipped to bearish, enabling a rally.
