If the market does manage to rally into late April I believe it would be an exquisite shorting opportunity. And I am not talking about the type of opportunity where I short in the morning and cover in the afternoon. I believe the top for 2010 would be in. These are the reasons:
- The government will start selling Citigroup shares in late April.
- Positive seasonality becomes negative seasonality.
- If we rallied into late April, could you imagine how stretched sentiment would be on both a short and intermediate term basis?
- Quantitative easing ends this month.
- Another wave of mortgage resets is starting.
- In the latter half of the year stimulus becomes a net negative year over year.
- Comps become tougher.
- Municipal and sovereign imbalances are getting worse.
2 comments:
"exquisite shorting opportunity" - that's the kind of conviction that i get excited about!
I would agree with that, although we'll have to wait to see what kind of momentum the market has and what it's internals are showing at the time (i.e. summation index, A/D, new highs, and the like).
Right now I see a shallow dip as those numbers are just too overpowering right now. The RSI we saw into the peak portends much strength and a quick dip that will power us upward to the 1200 mark and above. How high? Who knows, but shorting here will have to be done deftly.
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