Fear of Regret

1:00PM Update - Dont know...I dont see much reason for me to cover the shorts I have left. I can be wrong. As I said before, you can cover and try to reshort higher if you can but I am sitting tight...If we rally into 2740 range tomorrow, I will add back the shorts I covered yesterday...Maybe the last update for today. :)
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11:45AM Update - Well we got that first obligatory bounce to 2680 and decline back. Now we might be setting up a good bounce here into the 2740-2750 area. So risk averse folks close shorts and try to short higher. I might just sit tight. Wait and watch whats going on. 2740-2760 if we get there should be a good short for those not already short.
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I will start first with a section from the 'Zurich Axioms'

The Second Major Axiom
ON GREED
"Always take your profit too soon"

Amateurs on Wall Street do it. Amateurs in poker games do it. Amateurs everywhere do it. They stay too long and lose. What makes them do it is greed, and that is what the Second Axiom is about. If you can conquer greed, that one act of self-control will make you a better speculator than 99 percent of other men and women who are crambling after wealth.

Always take your profit too soon, the Second Axiom says. Why "too soon"? What does that puzzling little phrase mean? It refers to the need to cash out before a set of winning events has reached its peak. Don't ever try to squeeze the last possible dollar from a set. It seldom works. Don't worry about the possibility that the set still has a long way to go -- the possibility of regret. Don't fear regret. Since you can't see the peak, you must assume it is close rather than far. Take your profit and get out. It is like climbing a mountain on a black, foggy night. The visibility is zero. Up above you and ahead of you somewhere is the peak, and on the other side is a sheer drop to disaster. You want to climb as high as you can. Ideally, you would like to reach the peak and stop exactly there. But you know "ideally" doesn't happen often in real life, and you aren't naive enough to think it is going to happen now. So the only sensible course is to stop climbing when you have reached what you consider a good height. Stop short of the peak. Stop too soon. Sure, when the fog clears and the sun comes up, you may find you're less than halfway to the top. You could have climbed a lot farther. But don't nurse this regret. You aren't all the way up, but you are up. You've made a solid gain. What's more, you've made it and kept it. You are a good deal better off than all the blunderers who scrambled blindly to the peak and toppled over the other side.

This happened to a lot of stock market speculators in our Indian markets also recently!

Carrying out the precept of the Second Axiom seems to be extraordinarily difficult for some. The main difficulty may be the fear of regret.

The fear is particularly common and particularly intense around the stock market.

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Okay the market - Well the triangle is now officially broken. I am not going to post a chart of this today. Most blogs on the net already have this so you can look that up elsewhere.

So what next. This break gives a target of around 2250-2000 odd on the Nifty. Does not have to happen but thats what this breakdown is targeting. It will not happen immediately or in a straight line - Expect sharp rallies in between. BUT its not time to be bullish yet...Not yet...As I have been saying for long, bottom will be in March last week or April mid to end.

We can target 2525-2550 area first and maybe then have a bounce to the downtrend
line of the triangle...Or back to test the breakdown point of the triangle before collapsing again. Again this too will not happen easy - It will be a slow and tortuous ride.

I am not sure yet what to do with the rest of my shorts. I will wait and watch the markets today before making a decision. Maybe do nothing at all.

Why did I post the excerpt/axiom above? Well just wanted to say its okay to take profits early as a follow up to my earlier post. I used to regret doing this a lot..GREED is a very strong emotion just like FEAR(the 2 primal emotions that drive the stock market)...But nowadays, I tell myself - Its just another trade! Believe me - having this attitude in your trading will improve you as a trader by a lot.

I will post intraday updates later today.

Best.