Low Exposure, Growing Conviction

The 1420 level on the S&P put a tight lid on things. It brought a new low, but again, not much more. There are five waves up from the 1405.14 low. Obviously a new low would negate it, but there is now the very real possibility of a rally. With the futures up 10 points from the overnight AMZN and AAPL lows, it certainly appears a rally is at least building.

Doug Kass has his highest long exposure in five months. He's usually early. There is nothing to stop the cash market from correcting a bit of yesterday's rally and making him sweat. But with AMZN and AAPL holding strong after their revenue disappointments -- more and more of these, by the way, not a good sign -- a reversal could be in the offing.

Otherwise, 1396.56 could get tested. Or the 200-day MA which is now 1376.53. But for now I'm with Kass on this one. I bought SPY 141 calls yesterday and scaled heavily. My exposure is low, but my conviction is growing.