Ok, lets start w/ short position in Dow Sep Futures: In May 22nd the high was 15448. Three days later, the high was 15,438. June’s low was 14,474 That was a 959 pt trough. a 6% “correction.
Today’s high was 15,433. Based on that action, and the fact that, after watching CNBC last night, with so many “pro’s” bullish… I continue to want to stay short.
If you don’t want the future’s margin risk then buy some 15,000 puts and 14,500 puts. If you are long stocks, the time to buy your down side protection.
One thing I thought was interesting. Not hearing too much from the “Sell in May and Go away” folks.
Common saying like this are great . Til they cost you dough. Since the may low at 14,564, you’ve had a lot of heat. IF you didn’t cover on the June break, you’re looking at more heat here today to the tune of about 1,000 pts.
I think, actually, the high, if it comes today or Monday, will be the “sell in May” folks puking their shorts. Once they are out and actually, hopefully flipping and getting long, we should have a tasty correction.
Remember, we are just 2 weeks from August beginning. Europe shuts down. A lot of people leave the markets. Generally, the only people actively trading in August are pro’s. Especially if those pro’s are down $$ for the year.
Bottom line. I think this level in the Dow continues to be a sale. You have to decide how much heat to take. But I believe given market action and the psychological feel to the stock now, I’d still want to be short.
Can your whole reason for being long be based solely on your “reading of the tea leaves” from the Fed?
That seems like a dicey play to me. Hence my willingness to be playing from the short side here.
If you are a bull and think I am wrong, then fade me. One way or the other, I hope you make dough, honestly.
One caveat.. If we come in and next week start trading above 15,660, then I’d be long since gone from my short bets