The market resiliency continued into last week with a positive return for the eighth time in the past ten weeks. There are some cracks beneath the surface though, particularly with earnings starting to disappoint on a large scale – most notably with Microsoft (MSFT) and Google (GOOGL). 

Tech is starting to lag some – with the market rising of late, QQQ – if you look at the last four weeks of trading, it hasn’t gone anywhere, and has had negative returns two out of the last three weeks. 

I covered SPXU on Friday, much to my disappointment. I would have liked to of held on longer, but I didn’t want to be overcommitted to the short side at this point, and the easiest way to curb that exposure was by cutting a position in a 3x ultra short play. 

That doesn’t mean we can’t get back into it, but at this point, it wasn’t worth risking holding over the weekend and risking a Monday rally and I want the flexibility of getting quickly long if need be. 

If the wheels start to turn to the downside, this is a market that can easily yield a 3-4% drop over a 5 day period rather quickly. To the upside though, I don’t think there is much upside left, and if there is, it probably isn’t more than 1 or 1.5%

Heading into this week, I’d like to see the short side finally play out for the market. I think there is a good chance of that happening. But we can’t try and force it on the market, and if that means getting long again, then we have to do that. 

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