During my drive back to France from London I ruminated about the where we are in the transition. The stock markets have been going up in spite of the world economic situation. I trade the order flow so I had been long many times but could not understand why the longer term participants were buying.
My conclusion was two fold. The perception was that companies would make profits from China. India and Brazil etc and therefore they had been under priced. The other issue was that the same companies had real assets which were better owning than paper money which was being devalued.
I then thought about the slowing down we have begun to see as these newer countries ran out of buying power as their customers - the U.S. and the like - didn't have the same buying power as they did before as their ATM machines - property - had stopped paying out.
This led me reinforce to my previous conclusion that there had to be a test of the lows again. But timing is everything.
Monday saw the Asian timezone take the ES up. I listened to a recording of a recent interview with Jim Rogers who was repeating his mantra: short stocks, short technology and long commodities. The stock indexes are quite overbought and I quickly found a sell point for the ES at 1401.00. I covered those for a couple of points profit and switched to a short of the DAX @ 7156.00 as I would get more bang for my buck. I covered those at just above the Friday POC of 7124.00. Market seemed to find balance after that, at least for a while.