Maybe stocks have finally put together a nice base for a rally. There's an all-too-obvious inverted H&S pattern on both the NQ and the ES, and a lift back to around 1180-1190 seems not that difficult.
For me, I simply say – – and I really say this, out loud, to myself – – cash is my long. I am not interested in chasing bear market rallies. I'm going to probably miss some potential profits, yes, but I think buying into these rallies is ultimately as profitable as trying to short powerful bull markets. You never know when things are going to flip against you.
So I've got no problem having most of my portfolio in boring old cash and maintaining short positions on a stock-by-stock basis. Refering to the ES chart below, Chairman Bernanke – – good Dr. Bernanke – – could probably goose things up through that green rectangle and, gosh, with his team of patriots, maybe even push it into the red. That is, anywhere from 1250 to 1310 or so.
Safe travels to Jackson Hole, sir! Sha-freakin'-lom!
