Why I fear being long

While I take both long and short positions on the Nifty, I am more comfortable being short these days. It was not always the case. I was not always comfortable being a bear. If fact I remember that in Aug 2007 the markets worldwide had taken a beating and my system gave a buy on 17th August. I was visiting clients in HK those days and despite that, I called the office to take a big bet using call options. Despite the fact that the market had been falling through the month until that day, I was happy to go long. Naturally, I was happy to hold the long through a huge rally in September.

The point I am trying to make is that it was easy to be long those days. Yesterday, I went long and am very uncomfortable. I somehow feel like any moment something bad can happen and the market can move disastrously against me. The ubiquitous media keeps reminding me of the many things that are wrong with the world. It is almost as if everything that can go wrong is doing so at that same time. This kind of negativity, that is all pervasive, is making it very difficult to hold on to a long position.

This is a double edged sword actually. If the majority feels that being long is uncomfortable then I am really okay because it could just mean that it is the right time to be long. However, if this feeling of being uncomfortable with a long position is only a feeling of the minority and most people are still able to be long the in the markets out of sheer habit then I am in trouble.

International markets have not really provided any particular direction to the Nifty today. In any case, I do not need the international markets to decide what I have to do with my Nifty positions. I will remain long and will cut my long positions only if Nifty futures falls below 4603. I will not go short. I will short only below 4537.