Panda time.
So we have 3 "ranges" right now(1) Below S&P 820
(2) 820-850
(3) Above S&P 850
We teased range 1 this morning causing much consternation. If we close north of S&P 850 the hordes will move back into REITs, retailers, dry bulk shippers, commodity stocks, homebuilders, las vegas casinos, and banks! All the good stuff. Even condescending souls such as myself are giddy with Ultra long product in said sectors.... remember, we said if these Ultra longs hit $3 we were going to play. Obama is upon us soon.
Ah - the game never ends.
At this moment, I have no individual short names; and my Ultrashort exposure is the lowest it's been in a very long time. We won't be below 40-50% cash until we return to a bull market (or S&P 600s) but we're just about all long with what we do have outside cash (that could change - see below). If this is HAL9000 head faking, I'll grab short exposure back if we break below S&P 820 at the end of the day. Or any day we close below 820.
A week ago Tuesday commodities were flying [Back to the Future - Commodities Rule Again] and everyone was happy go lucky. Giddy in fact. The New Year was here - everything changes when your calender ends in '08' instead of '09'. All our problems go away. That was the time to be heavy in the shorts - instead everyone wanted to buy since they didn't want to miss the move. Well you got the move - oops. (wrong direction, eh?) It is amusing how quickly the world changes.
As always, nothing matters except that close at 4 PM but THUS far we have a trademark setup to be quite bullish - we had hoped yesterday for an ugly morning today -> our wish was received. Now to complete our dreams of unicorns, fairies, and Obama we'd like to see a close north of S&P 850. Then all the technical traders of America will converge onto this market and we can talk about "bottoms holding" "excellent retests" and "the Fed will save us" (again)
Could it really work out that well? Seems impossible... but nothing is impossible when you have President Elect Midas on your side.
If *this* scenario works out, our hot hand of the past 8 weeks continues.
Our perfect wish list..... past this reversal (if it happens) ....would be a 4-7% rally in S&P, with a lot of the "junk" jumping back up 15-20%+ so we can begin shorting a lot of individual names in the groups that have just been most trashed.
This market is actually a lot of fun from a trading angle - is it so technically compliant it is amazing. I think it's possible all fundamental investors have been chased out of the market and hence the technical traders are dominating everything - hmmm...
But for investors? Forget it - investing is so 2007. "They've" just been whacked to the tune of -11%+ in a week and a half.
Watching the ranges and will adjust accordingly. Remember tomorrow is our last day until inauguration (Monday is MLK Day)
No positions
