October is turning out to be far more “trick” than “treat” for equity bears.
At the midpoint of the month, things looked sensational. Stocks were breaking down left and right, and it seemed that we had finally encountered a sea-change in the market.
Since then, however, stocks have exploded higher with a gusto that I underestimated. I certainly expected a bounce, but nothing of this degree. Much worse, it seems that the cessation of QE (announced yesterday) has done nothing to slow the equity bulls down.
This kind of environment can really mess with one’s head. Let’s take a look at the past couple of days on the ES: (more…)
What a vomit comet of a day, huh, folks? Below are a couple of the kinds of patterns I still love on the short side. I find them more safer and saner than indexes in general these days.
Interest rates utterly collapsed at the equity market’s bottom on October 15th, and they have soared since then (as have, obviously, stocks). We are nearly a monstrous overhang at this point, however, and my view is that rates will resume their downward fall soon (with bonds, naturally, strengthening the whole while).
Long ideas have become pretty rare from me, so I thought I’d at least throw one out that still looks pretty good – Alexion Pharmaceuticals.
I mentioned off-handedly to my Slope Plus subscribers yesterday that gold was my biggest short position. Well, “precious” metals are getting slaughtered (again) this morning, with silver being hit particularly hard. It certainly is puzzling, given the trillions of new fiat dollars kicking around, but there you have it.