Friday, July 13, 2007

Irrational exuberance? No, says Hulbert

Mark Hulbert writing for Marketwatch (article) says his newsletter sentiment indicator is bullish. Despite the rally, newsletter writers are actually becoming more and more cautious. I confess, that my gut feeling is also in this camp, that I think the rally is overdone and more downside is imminent. I looked at quite a few puts (bearish bets hoping for a decline) today.

I hate to buy into runaway strength. However, right now, that would seem a better play than buying puts. I often write that calling top is a losing game, and at this time that would be exactly what buying puts would be, a bet that I can call the top.

Good thing the weekend is here. Enjoy the long summer days.

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