I have started the short SPX campaign this morning, putting on about half my position. I will wait either for tomorrow or early next week to put on the other half, preferably on a good ISM index number coming out. The time frame on the short is 3-4 weeks, looking for lower prices as the Democratic primary in Iowa gets closer (February 3). Market doesn't like uncertainty, and right now, its a neck and neck for the lead in Iowa, with Buttigieg, Sanders, Biden, and Warren all between 10-25% in the polls.
As we get closer to February 3, stock prices should get lower as the focus is on potential bad outcomes with a Sanders or Warren win in Iowa.
A longer term short (3 months +) will have to wait, as we'll probably see a reflexive rally after the first major pullback from the big surge from October to December, so this short is to play January weakness ahead of the Democratic primaries, with stock buyback flows very weak as corporations are in blackout period and traditionally don't buyback much stock during this month.
4 comments:
When does ISM report?
ISM came in at 47.2, expectation was 49.0. Stocks are going up anyway, so it hasn't changed anything. The bulls are as bold as ever.
They sure are. Seeing divergences aplenty. Are you waiting till next week still?
Yes, waiting till next week to add more short. Probably will be a gap up on Monday if there isn't World War 3 by then. LOL.
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