The Easy Trade Is Over

It was highly likely that we would see a bounce from the extreme oversold condition and excess pessimism of a week ago. Now that we have seen that bounce the future direction is more difficult to predict. We are not yet overbought and sentiment is muddled.

Normally, I would expect to see a retest of the recent lows at some point but in recent years we have seen numerous instances where the market moves in a single direction with nary a correction. In the past week I have sold my trading longs and written covered calls against some of my core positions. I would now describe my posture as a medium sized net long position. Have  great weekend and a belated Happy Thanksgiving.

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