Regular and/or observant readers know that very late in August, I posted – – and subsequently deleted – – a post from Boston Wealth (written by Mortie) with a very bullish take on the market's prospects. In fairness to myself, I genuinely did disagree with the conclusions of the post, but to take a carefully-written piece of work and toss it in the dustbin simply because I disagreed with it was wrong-headed and – with hindsight – a telling warning about the sea-change that was about to take place.
I wrote to Ben of Boston Wealth this morning in the most humble terms, and he graciously accepted my apology. I believe in the words of Desiderata – "As far as possible without surrender be on good terms with all persons." I appreciate forgiveness, particularly when it's warranted like this. Ben promises more posts will be coming in the future, and I shall treat them with the respect they deserve.
There seems to be virtually universal agreement that 1250 is the next stop on the S&P (Gainesville, Georgia notwithstanding), although I still maintain the bulls are going to be sorely disappointed. The confidence – in some cases, smug arrogance – of the bulls can be understood in light of this month's price action:
Equity rallies based on government manipulation don't strike me as sustainable, and I continue to find, and secure, short positions that I feel are promising. I do have a small number of bullish positions whose charts I genuinely can get behind, but my largest hedge – a very substantial SPY position – was closed this morning and I remain positioned heavily on the short side.
