I went to all cash on Monday morning selling my positions one after another like dominoes going down. The reason I did was that I got a big warning on the market monitor. Over 20 Stocks were up over 50% on April 24. What the 20 > 50% signals is that there is over exuberance in the market the bullish side. That's the equivalent of red lining your car. You could push it more... but its not going to end well.
The Beer Goggle Effect
After a big run, you will start to see the quality of setups diminish. Nonetheless, many traders start getting beer goggles and start thinking that every setup looks good. Next thing they know it they wake up the next to something hairy and it hurts when they pee.
In my opinion, the market needs to hit the reset button here and clear the junk out so that the good risk / reward trades are allowed to present themselves.
Remember, cash is a position and sometimes it is a very good position.
Cheers!
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