"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

Traders may have to extend their holding periods longer than just a few days. The big Wall Street guys are traders too, but clearly the holding period is different.

The typical small investor thinks they are successful traders if they make a few bucks here and there, and measure themselves by how many dollars they win on a trade. The smart money traders have time frames of about 3-4 years, sell calls and puts during oversold and overbought conditions, and measures themselves by how many millions of dollars they make during a market cycle.

Regardless of the market environment, big money traders position themselves accordingly. They look for a trend, know on average how long the trend will last, and invest accordingly;

1) In 2000, the market transitioned from Bull to Bear when investors found that companies were lying to them, and Wall Street was issuing bogus earnings reports. This lead to the bursting of the NASDAQ bubble, and an initial bear market trend. A final low was reached in March 2001.

2) After a brief recovery, the market mysteriously headed downward into August 2001, and someone had pointed out that a few select investors were heavily short stocks of the major U.S. airlines.

On September 11th, 2001, two U.S. airliners rammed into two World Trade Center buildings.
To this day, no one has revealed the identities of the investors who heavily shorted the major airline stocks just prior to the 9-11 attacks. Believe me, someone knows, but nothing has been said.

The 9-11 attacks began another bear market trend which lasted from September 2001 to March 2003 (about 18 months). All during this time, there was still no word on who shorted the airline stocks in August 2001.

3) In March 2003, a new bull market trend began in the S&P, and Dow Jones Industrials, carried the two major averages to new highs. The NASDAQ remained well into bear market territory during this trend. The rally in the S&P and Dow lasted 55 months, but the smart money began pulling out at the 48 month mark.

Well into the 4th year of the rally, financial TV commentators were still screaming buy! But, in reality, many knew the bubble in the real estate market was about to burst.

In 2007, six years after the 9-11 attacks, there was still no word on who shorted the airline stocks in August 2001.

4) By January 2007, the real estate party had ended. To make matters worse, investors learned that Wall Street was lying to them again, and found ways to rape investors by issuing bogus mortgage investments.

The current bear market was one of the deepest point declines (-55%) witnessed by the major market averages. The bear market is long in the tooth, now in its 18th month. Given the severity of its impact economy, the bear could last a little longer, but the norm is about 12-18 months.

In 2009, eight years after the 9-11 attacks, there was still no word on who shorted the airline stocks in August 2001.

Smart money traders invest for a period of about 3 years in new bull market trends. They short or stay out of the market for about 12-18 months during bear market trends. Given the recent strength in the markets, it looks as if the accumulation phase has begun.

And, of course, still no word on who shorted the airline stocks in August 2001.