The Selling Continues–What Now?

There continues to be consistent selling underneath the surface while the indices are a stone throw away from all time highs.  The momentum names no longer have momentum $LNKD $TSLA $TRLA $Z $NFLX $BIDU to name a few along with all the Chinese names. Like I mentioned on Monday–under normal circumstances I would take a full size position on the short side on an index or $XIV assuming that the indices will catch up to all the damage being done underneath the surface.  However I must restrain myself and tread lightly on the short side because the dynamics of the market have changed.  To put what is going on underneath the surface in perspective read Monday’s post–Subtle Changes.   The shorts have many valid reasons to press here but they are scare, the Bernank/QE has demoralized their psychic.

I’ve been trading lightly due to the fact breakouts are not really following through since the mid October–at least for me,  you can see that with my equity curve last month; The Month That Was, and probably with your own trading lately.

The consensus right now is that a year end rally is a lay up and there are stats to prove it.  I’m in that camp, however I’m nimble, quick not only to change my mind but to act on it, and I have no emotional capital tied to the market direction one way or the other.



The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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