The Bears Take Over...

Well, the only good thing a stock options trader like myself can say about the market now is that, clearly, the bears has taken over. Which is a good thing for aggressive directional traders like myself. The only questions to answer now are, how long, how low? Like I mentioned yesterday, the near term prospects are pretty clear; A test of the 2007 lows, failing which a test of the 200WMA at about 11400 would be in order. Even if the 2007 low holds, I don't see it as a significant enough level to stage a sudden turnaround in this weak environment, therefore, any rebound can only be construed as a dead cat bounce. The long term prospects remain extremely scary. If history is anything to go by, a precipitious decline all the way to 10000 could also happen in a period of crisis such as this one. I am not trying to scare anyone, neither am I predicting anything. As a trader, I merely trade whatever the market is doing, not what I think it will do. I think a huge shake out is good both for the economy and the market. Let the punters exit the stock markets and let the subprime loans disappear forever (subprime should never exist in the first place and anyone not fully qualified for credit should never have access to it!).