Now that we are getting our bounce, I wanted to focus on an item that is of some short term concern. Rydex traders have remained stubbornly bullish as the market has corrected in recent days. This data point does not argue for a quick end to the current correction.
Ideally what I would like to see is some sideways movement and possibly a test of yesterdays lows. This would achieve two things. Some newfound bulls will get shaken out and more time will pass. A correction is both a function of time and price and this correction is only 3 or 4 days old, depending where you start to count. We have had a correction in price, now it would be nice if some time passed.
Tactically, I remain net long but would like to see how the correction progresses before adding back the positions I shed into last week's strength.