Walking The Tightrope

There are alot of headwinds about to hit the economy:
  • Austerity measures will hit global growth.
  • Municipalities are also enacting their own austerity measures.
  • Stimulus is wearing off.
  • Mortgage resets are about to hit.
  • Inventory rebuilding has largely run its course. 
  • Comps are getting tougher.
That said, the short term outlook for the stock market is positive as sentiment became too extreme and we are now working off that extreme. I am likely going to press my longs until expiration next week. At that point I am likely going to go to cash as I want to err on the side of caution with the macro headwinds we are facing.

The outlook for today is a tough call. A pullback would not be surprising after yesterdays surge. But I think shorts and under invested bulls will be pretty quick to jump on any weakness.

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