ThinkForex - Analytics

ThinkForex

455.75 5.25/10
80% of positive reviews
Real

Why I would like to short my own nest egg

In light of the recent turmoil among global markets I finally plucked up the courage to peek at my superannuation charts (equivalent to pension / SIPP/ or 401k, depending on where you are in the world). With mixed feelings I present my findings. 

 

Please Note: I have written this article in a light hearted analysis, of my own super, from the eyes of chartists. Therefor please do not, under any circumstances, take this as personal advice for your own superannuation. 





The Chartist in me is very excited with the bearish implications:
If the above charts represented an index, stock, commodity or currency cross, I would be presenting signals along the lines of "wait for a retracement to the broken trendline or seek bearish setups on lower timeframes". The multi-year bull run on each market has broken a key swing low, which is a sell-signal to traditional Dow Theorists. If I were to seek an exit point for my long holdings then I have to decide if I want to jump ship now, wait (and hope) for a retracement towards the broken trendline or simply wait and pray for the next bull run. Decisions, decision. 

The more human-part of me is less excited:
We all like to see investments go up, but at the same time we cannot expect it to go up in a straight line (like it has these past few years). Yes my nest-egg is probably due a correction (or almighty reversal) but it should also be remembered I am a fair few years away from retirement, and probably at least a couple of recessions away too. Therefor I should probably stop looking at the chart and let the markets work its magic 'Warren Buffet style'. 

The fact I even bothered to look at this today is a good proxy for market sentiment:
Not everyone looks at this every fay, or hardly ever at all. But the fact I bothered to log in and make sure I still had some of the nest egg does clearly show how concerned I am about global developments. And if I am concerned then there will be others too, with much more at stake, and more likely to make irrational decisions (pushing prices down further). 

20% correction in a few sessions does not sound like a correction to me:
On a more serious note that fact my super is now catching up with Indices and global sentiment it is hard to not think of recent events as something a little bit more sinister than a 'much needed correction". I hear reports of stocks now reaching 'correction territory' (using the 20% benchmark) but let me put it this way. Does a stock which takes years to climb, which wipes out 20% in a matter of a few sessions, sound like a correction? As it certainly does not in my books. 

Unfortunately, despite the screaming sell signal by my own analysis, I do not have the ability to short my own superannuation. Nonetheless I will await a response from my provider, in hope of this option becoming available before it is too late. For now I will have to suffice with derivatives available to trade as per usual. 



To leave a comment you must be or register

By visiting our website and services, you agree to the conditions of use of cookies. Learn more I agree