Monday, August 25, 2014

Draghi Promises QE

We are almost at SPX 2000 with anticipation of a QE from Draghi, who was dovish.  I guess it is Whatever it Takes, part 2.  That is putting a bid to Bunds, which are again back towards highs for the year.  Somewhere along the line, it should be a good short, but it is very difficult to make money on the short side.  I was short going into last Friday, expecting consolidation, but it never even got to my modest target of ES 1980.  I covered, fearing another potential gap up after no WW III weekend.  And this time, it is a Draghi gap up.  They all pay the same for longs, and hurt the same for shorts.

I have decided to change game plans and will buy Treasuries instead of going short stocks to play for a down move.  Treasuries remain amazingly well bid despite new all time highs in S&P.


Anonymous said...

I am reflecting why I have not been participating the long side this year, therefore missing the gain.

Am I throwing in the towel? Or does it hint that the peak is coming soon?

Any comments?


Market Owl said...

Peak is coming soon, but it will not be easy. Tops are much more difficult to time than bottoms. Best thing to do is just stay out of the way. There will be easier times to short.

If you are comfortable going long in a bubble, than go long. But I am never comfortable going long a bubble.