The Short Term Bear Case

I am considering shorting into a gap up on the employment report for the following reasons:
  • Sentiment surveys are still at bullish extremes.
  • After pulling back a little during the recent correction, Rydex traders are back in an extreme bullish position.
  • There has been extreme call buying for two days in a row.
  • The beginning of the month has passed.
  • The short term oversold condition that existed at the beginning of the week is gone.
 But the following are making me have second thoughts:
  •  I hate being short at this time of year.
  • While the market is slightly overbought now, it is not at an extreme.
  • Other than the ISE Equity, the 10 day moving averages of the put/call ratios are not at an extreme.
I am still considering if and how to play a gap up this morning (if we get one). 

1 comment:

Anonymous said...

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