Caution on Short Side Advised

After looking at a couple of daily charts on the sp500 versus the MACD histogram I have to advise a lot of caution at this point on the short side of the market.  Why?  Because I am seeing a possible bullish divergence.  If we close higher today semi strong it could open a possible door to a bullish confirmed divergence on the daily.

I am also seeing signs the VIX could break down a bit again near term with a similar bearish divergence.

The other issue is the recent SPY volume we have seen on the recent move back down to the previous low range… it has been pitiful !!!

This puts a possible risk that that market does not have enough energy to bust down yet.

Combine that with the fact that a good majority is heading for the beach and you have the recipe for a possible huge upside short squeeze.

This is a dramatic reversal of opinion from my previous two posts, but I have to call it like I see it.  I am not saying new bull run or anything like that… just possible more extended short squeeze which can very very cumbersome to those looking for more immediate downside.

Major caution advised on the short side right now, possibly for the whole duration of this week.

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2 comments on “Caution on Short Side Advised
  1. JR says:

    Just read article on Bank Stocks Getting Worst of Fears Recession Is Back at CNBC.
    Here is my read on what is happening in the economy and in the market.
    We have lived with fiat money. Fiat money is money that has value only because of government regulation or law, so long we have actually come to believe that worthless paper currency is worth something. The term derives from the Latin fiat, meaning “let it be done”. We are awaking to the reality that fiat money is essentially worthless. In America the dollar is just worthless paper backed by the full faith and credit of the Federal Government.
    But what happens when the full Faith and Credit of the Government is called into question. That is what happened over the Debt Ceiling.
    All over the world governments and investors realized that without the Federal Government’s backing, the dollar was no more than paper. Hence the flight to gold.
    There was a time before the Republican’s destroyed the illusion, that governments held U.S. Dollars as their reserve currency. But wait, what was the real value of their reserve? Without the Good Faith and Credit of the Feds its real value is zero. So when it became obvious to governments and investors through out the world that they could no longer count on the Good Faith and Credit of the United States Government, a light when off. If the U.S. can and probably will not make the payments on their debt, their Good Faith and their Credit no longer exists.
    Too bad no one pointed out to the Republicans that there are unforeseen consequences for being stupid.
    Bringing the President down is not without consequences, especially when you are using the Good Faith and Credit of the United States Government as your weapon.
    CRASH, get out your wheel barrows!
    Now that the Tea Party has opened Pandora’s Box, the world has become aware that there is no wizard behind the curtain!
    Exit the dollar. Exit the value of the dollar.
    Without belief in fiat currency the whole foundation of our modern economy collapses!
    Be afraid, be very afraid!
    This is why fear dominates all the world markets!

  2. Neal says:

    JR:
    You’re talking about a crash and wheelbarrows of worthless money. You’re suggesting be afraid, very afraid. Also that we can look forward to the whole foundation of the modern economy collapsing. With all due respect to your ardor, this advice sounds like a sermon based of Revelations and that you plan to be one of the blessed saved ones, one of the worthy Remnant. By the way, continue to think there’s no wizard behind the curtain? The wizard doesn’t want his tricks revealed. But let me tell you a little secret, Plunge Protection has been doing a very credible job of calming down Joe Six Pack even if not his spiritual leader, the one with the ambition to join the Remnant. The deus ex machina, the wizard behind the curtain has been using the end of the day furtures buying stock market to pacify the nervous nellies. Sorry, but the end of the known world is not at hand.

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