1970 Resistance

There is a fair amount of resistance at the SPX 1970 level, where we rallied to and failed in early October.  It is a good risk reward to take a short term short at those levels, shorting the Eurostoxx as a proxy for shorting the S&P.  I would be loathe to outright short the S&P, because there are other markets that fall much more during weakness.  Or better yet, just go long Treasuries.  I am still long Treasuries from higher levels but with my view on the current equity market, I will hold on to them until we get to lower levels on S&P, around 1920.

With the eagerness to buy dips by the investor community, you have front run a lot of the snapback rally from the dip.  For the next few days, with the FOMC coming up, it could set up a disappointment if QE is not extended, even though QE ending is consensus.  Hopefully the Ebola excuses for selloffs will dissipate and we can focus on real reasons for strength and weakness.  Mass hysteria knows no bounds, as everyone seems to be like cattle fed GMO corn, but this time, it is news force fed to induce fear or relief that Ebola is not a crisis.

Anyway, short term bearish on the market for the next few days.