Wednesday, May 11, 2016

Shorts Squeezed AGAIN

The up move you have seen since the NFP came out below expectations is just more of what you have seen since 2009.  Shorts getting excited by several down days in a row, waiting for the big one, and then you get dip buyers and nervous shorts covering to form another quick bottom.  The difference this time to what you saw back in the earlier years of this bull market is the continuation.  You are not getting as much continuation off V bottoms as you did in 2009-2014.  It reaches prior highs, and stalls, chops, and then drops again.

It is hard to push this market up much beyond 2100 due to weak fundamentals.  We are getting even lower interest rates despite the rallies and that is helping the stock market but these benefits are marginal when valuation is so high.

I am glad to not have shorted recently because I would have been one of those squeezed yesterday.  A short squeeze out of the blue based on no news.  Now we have oil rallying hard and the market is down.  Something you wouldn't have seen in March.  This market is tired, but the bull is always going to give bears a hard time until they give up.  Based on the high put/call ratios day after day, the bears remain very willing to bet against this market.  They have not given up.  More grind and chop ahead.

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