I've got to say, I'm in a real quandary right now.
On the one hand, I've got a lot of faith in my WAG, which states that we've got another 40 or so points to the upside on the /ES from current levels. That's not the current environment in which I'm dying to be short.
On the other hand, on a chart-by-chart basis, I am finding virtually no stocks at all which are appealing longs, but I've already got (and am in place on) 106 charts that look like terrific shorts, and 300 in my Bounce House watch list, waiting for better prices.
Take DRQ, for instance, which one of the 106 shorts I've already got. It's down over 7.2% right now, and the chart looks utterly broken.
The concern here is that the right shoulder could keep forming, and the real break won't take place until we go beneath the neckline. For energy stocks, the chart above is replicated again and again and again.
I guess the sensible thing to do is to stay in the shorts that I feel make sense, but balance it with a large long position on something simple like the SPY. That will, of course, pretty much neuter any good gains to be had from a market slump until I'm more certain, but it will also protect me from upside.
