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.