• Goldman Sachs

Two Bounce Plays that Setup Nicely

Activity on the street has turned completely bearish, and everyone is still talking about last week’s news. But what happens when that becomes a distant memory, with no new news to sustain it. 

I could be wrong, but I don’t believe the Fed is going to say anything near-term that would add additional logs to the fire and so many traders are so concerned about the market crashing once tapering commences, that I have to wonder whether we’ve seen the full extent of the current pullback in contrast to what they think should happen?

Maybe not, but what you are not hearing are lots of people proclaiming that we are going to hit new highs soon or that they are still bullish on this market. 

I’ve always thought that the market wants to induce the most amount of pain on the greatest amount of people. If you know where the pain is at, then that is where the market wants to go. 

Bears are thrilled we are getting action to the downside, and you’d think we are experiencing a ‘Zombie Apocolypse’ with the huge bearish positions they keep taking on. 

And if they are wrong what does that mean? 

MASSIVE MASSIVE MASSIVE SHORT COVERING

UNBRIDLED PAIN

GINORMOUS SHORT SQUEEZE

You get the picture. 

So to take advantage of that, here are two charts that I really like for playing the bounce on. 

Long: Goldman Sachs (GS)

Goldman Sachs

Long: PG&E (PGE)

PG and E swing trade long setup

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