Stocks Will Go Higher

With a gap up after the 3 day weekend, at all time highs, it is quite the punch in the gut to the underinvested, and even more so to those all in cash or short.  The thing about the short side is that you get paid during short, brief periods of time, and in big chunks, but most of the time, you will bleed, and bleed some more.  I am talking about the overall market here, the S&P, not individual stocks.  Bad companies will go down regardless if it is a bull market or not.

I kind of just gave up on shorting the market for the most part from the fall of last year.  If something doesn't pay, why keep doing it?  Fed is still printing money like crazy, and has absolutely no desire to reduce their balance sheet.  

Anyone that says tapering is tightening doesn't know arithmetic.  The Fed balance sheet is getting larger, not smaller.  They are still doing QE.  Interest rates are at zero.  There is no tightening going on here.

Shorting wasn't paying so that's why I decided to find another method to express my longer term non-bullish views on the market.  Being long bonds over the past month was profitable while equities were going higher, and despite strong jobs numbers.

There will be a time to go short equities again but I will only do it under perfect conditions.  But I will go long bonds under less than perfect conditions, and also go long stocks under less than perfect conditions.  In an easy money environment, following the Fed trade, being long financial assets is much easier than being short them.  That is the underlying fundamental state of this time.

Grind higher.  It feels like another slow week with few opportunities.