Sunday, June 19, 2011

Happy Father's Day

Hi, traders, and happy Father's Day to all the dads out there.   I'll be golfing tomorrow for the first time in about three years (bad back doesn't allow me to do it often plus it's just frustrating) so I won't be trading to start the week, but based on Friday's action, I think stepping away was the right thing to do (although I do see JVA was up another 10% or so without me - nice).  

If I can summarize this market in a few sentences, it is this.   The market is long overdue for a meaningful bounce and in a technical position to do so.   However, just because it is in a position to do so doesn't mean it has to happen.   Until every single intraday bounce doesn't get sold, there is no reason to expect this market to move higher.   The intraday action continues to be awful and dip buyers have yet to be rewarded.   Remain cautious.  

In my opinion, barring a crash, the easy money on the short side has already been made for this period of the correction.  Trying to short here will be difficult unless the market moves sideways for a week or so longer just because of where we are technically.   At the same time, as long as the Greek crisis hangs over the heads of all the world markets, it doesn't look like there are going to be any institutions willing to step out and buy stocks and start a tradeable bounce. 

When add the Fed meeting this week to the Greek mess and a lack of positive catalyst out there, it does not look like an easy recipe for profits on either side of the market.  Therefore, I think I will likely remain in cash and just continue to clear my head a bit.   In hind sight, I really wish I had just kept the shorts I started back in mid-May and rode them down, but I did NOT expect this correction to actually be as smooth as it has been to the downside.   I expected a choppy one with lots of reflex bounces to mess with shorts, and really, we haven't see that at all.  Live and learn I guess.

Good luck if you're trading heavily right now, but after fighting this market for a while and not really winning, I am fine with taking it easy until things settle down.   Take care.

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