When the Fear Hits the Fan

The market finally sold off peaking at NASDAQ 2204 today. Your friendly neighborhood Kcap Team was fortunate in reducing significant exposure at NASDAQ 2203. Breadth was negative at around 2:1 and volume was slightly heavier than yesterday. Amazingly and predictably the wished for pullback materialized yet didn't produce many dip buyers.

It is a beautiful and sometimes embarrassing phenomenon to watch human psychology in all its glorious action. The likely scenario is for the market to pullback even further while fully invested Smart Alec Bulls convince themselves how healthy this is. Only after truly bad news surprises the market will their capitulatory selling take place with a spoonful of good old fashion fear. That will be the point in time when cash levels have risen and can provide further fuel to the year-end rally that IS STILL UNDERWAY.

If You Held a Taser to Our Head:
Although we raised some cash today we are still plenty long. However, the flexibility we now have will be used to get even more aggressively long than we were before. We'll be waiting for the Fear to hit the fan! Our largest concern is that we ourselves do not fall into the same trap that the Smart Alec Bulls will find themselves in.

Hope you raised a little cash today.

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