Shorts Not Looking Good

Its not always tangible, but when you've seen a play a hundred times, you sense what the next scene will be.  I am still short, but I no longer expect a move back to 2700, the volatility is too low near all time highs, the complacency is not as high as I expected it to be when we got back up to these levels.  Even without a settlement of the trade war between US and China, the market is ignoring the tariffs and just going higher.  The put call ratios are not low enough for the rise in the SPX, so it definitely feels like hedge funds and retail are not fully on board.

I will not add to the short position, keeping it a reasonable size for the level of my conviction, which is decreasing every day.  With the threat of Democrats taking over the House in the midterm elections in 3 months, I don't expect a surge higher before then, so I will be patient. 

The leading indicators point to growth decreasing in the beginning of 2019, so we will probably make a top right before then, in December, once the trade war with China is over and the midterm elections are behind us.  Until then, there is still a wall of worry to climb.