Ingredients For A Bounce

The ingredients for a bounce are now present.
  • The S&P 500 was down over 55 points from its highs. Inline with the 4%-6% corrections we have seen since the July low.
  • We are approaching the end of the month, which is seasonally strong.
  • We are finally seeing some put buying rather than complacency
  • The market is oversold in the short run, although there is room for it to get more oversold.
  • The S&P 500 is at support.
By selling puts and purchasing Amgen I have moved myself into a slightly net long position. This does not change my bigger picture bearish outlook and is largely a function of my enthusiasm for my health care longs. In the past few days both my pharma longs and my SPY short have been working for me.

2 comments:

Chaos! said...

I'm nibbling on the long side but concerned that the CBOE put/call isn't showing enough fear for a meaningful turn. Upturns will will likely be temporary until it does.

Anonymous said...

tHIS IS DEFINITELY THE BOTTOM DAWG.

WERD UP. FER SHIZZLE