I view yesterday's rally as incomplete. I will be positioning myself to be long into weakness today with a target of 1300-1306. The first level is simply a round number, psychological target. 1306 is the 78.6% retracement off the 1074.77 lows measured from the 1370 highs of May.
The 1265 area could provide support.
I was somewhat successful with two shorts yesterday, but would have made far more if I just hedged the first short with an e-mini or equivalent delta in an ETF. Hindsight is 20/20, and my business is about looking forward.
The rally occurred on strong internals, reflecting broad participation and aggressive buying. It must be remembered that the most face-ripping rallies occur in bear markets. Bloomberg noted that the S&P is having its best month since 1974. Recall that was during one of the worst bear markets in history.
Yesterday's rally felt anxious. I don't think the true angst is out of the market just yet. But I do think it can go higher.
No comments:
Post a Comment