Save Your Ammo

There will be better setups to play counter trend.  With the down Januarys the past 3 years, investors' short term memories create trading biases which are usually not profitable.  When you have strong inflows like you did at the end of the year, it is a clear shift in investor sentiment which doesn't change on a dime.  Although my forecast is as an S&P blowoff top that will peak in the spring of 2017, there is still a lot of time between now and then.

When I see Stocktwits SPX and SPY sentiment at bearish levels, I know that retail is wary of this rally and thinks it is going to go right back down like we did in July.  On some level, retail traders can't believe that the market is going up on anticipation of Trump goodies.  They still view that as an uncertainty, when it is a near certainty that Trump will do massive tax cuts.  Republicans never met a tax cut they didn't like, and they control both houses of Congress.

Wait for a better opportunity when retail is on board the bull train.  They are still too cautious considering the strong rally for me to want to play a counter trend trade short in S&P.