Markets up today after days of sell off. I am not chasing this rally though. It feels like a lot of short covering to me. But I am holding on to most of my longs but sold off some of my SSO into the strength. The markets may rally tomorrow but there are too many headwinds. Further, the financials and GE did not rally today. The Chinese stimulus is good news but probably not enough the sustain the markets to rally for a few more days. The unemployment numbers coming out of the US was horrible today and the market wants to rally so bad it kept blinders to the numbers.
What I am thinking in the back of my head is that a few notable perma bear hedge fund managers are coming out and calling for a market bottom.
Ultimately though, I stand firm in the belief that the market will bottom when the S&P 500 falls below 550. But this does not mean we head straight there. We could see a multi-day rally that takes us over 900 on the S&P first which no trader should miss out on.
I am holding tight to my FXI, agriculture and oils for now. Selling off a portion of my S&P longs (SSO).
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