Waiting For The Fat Pitch

While a strong case could be made for a move lower, there is also the possibility of one last push higher. The market is not yet maximum overbought and we have not yet seen the throw caution to the wind attitude of investors during the latest rally.

While the current setup probably warrants a slightly short posture, I am waiting for the fat pitch. If we get that last push higher, I will move to a short posture. I shoud do fine in a down market as I am long defensive stocks (healthcare, utilities) versus a short in the SPY.

1 comment:

PJ said...

Plausible ... I do think we're in for a bit of manipulation upwards by the government before the Senate cloture vote on the health care bill ... New highs in equities might help them get votes from wavering Senators.

Still, I wouldn't be surprised to see the headline indices -- DJIA and S&P500 -- make new highs while the things I'm shorting, financials and small caps, trend down. And if they do go up, it will be a tiny amount, maybe 1%. I think they topped in October.... Shorting at 10 am this morning, or at yesterday's close, both of which I suggested yesterday, would not have been bad entry points.

I would scale in if I were you.