XLF continued

I remain short this market via the XLF; however, with the current government sponsored Tom Foolery, I feel less comfortable about it. What does bring me comfort in this trade is knowing the following:
1) Selling strength (i.e. overbought) while XLF trades below its 200 day MA has been extremely profitable.
2) Every other attempt at 'manipulating' financials (bailouts, banning short selling, etc) has not worked and at best has presented great shorting opportunities.
3) There continues to be a ton of overhead resistance.

What sucks:
1) There's a chance that eventually one of these 'manipulation' strategies from your elected government officials could work - this might be the one.
2) Financials have been rallying after earnings for the last 4 quarters. Investors/traders realize that the end of the world isn't here so they buy. This euphoric buying usually dies down pretty quick ...this time it might continue.


In conclusion, I'm just trying to sort out these thoughts for my own psychological peace but will ultimately do what my system tells me to do, as it has been exhaustively tested. I came across a good quote the other day to the effect of: When I'm designing and testing my system, I am a NASA engineer. When I'm trading the system, I'm just a space monkey doing what I'm told. Easier said than done.