One might think that after Friday's late day 10 handle rally in the S&P 500 and with oil being up another 2% this morning that the S&P futures might be under pressure. One would be wrong as S&P futures are actually slightly higher as of this writing and were 5 points higher earlier. I am left scratching my head at this action.
As I wrote this weekend its difficult for me to make a stand in either direction at this point. I am tempted by the short side but if I get squeezed into the end of March, I will be forced to cover as we head into the strongest month of the year, April. Thus, I remain long cheap, defensive stocks with SPY Puts as a market hedge.
The most daunting aspect of the market is not that it refuses to go down. It is that market participants refuse to back off their bullish views despite spiking oil and unfavorable geopolitical events. Had I been told a month ago that riots would break out across the Middle East, with governments being toppled and oil prices spiking I would have been certain that this would put a scare into investors. I would have been wrong.