Monday, March 30, 2015

Short Setup Coming Soon

This one day rally has a high probability of being a one day wonder.  You do have a lot of automatic inflows on April 1, and spillover buying the next day, so that could support the market later this week, but after that,  the market will trade more on fundamentals and prepare for upcoming earnings season, where expectations are weak.  I am sure you will get some selling pressure next week as we get closer to the middle of April and start of earnings season.

I am currently short crude oil, so I don't feel the need to add short exposure to S&P at the moment, but I will be tempted to do so early next week.  It could be too late by then, but I would rather wait till after the nonfarm payrolls report and Easter to start my short operation.

I see very limited upside till you get into the middle of earnings season, where the disappointments should be fully priced in, and we can rally again.  No big picture opportunities at the moment, but it does feel like the dollar will have to consolidate its gains for quite some time in a range before we see the next trend move.

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