Background:
I closed all remaining longs, which were basis TSX (Canada) in May, which I had held since 2003 or so. Before that, I had closed out bank exposure (this past fall) and gold exposure (this past March). I went short May 29, basis SPX. The latter has worked out OK, but we are at a new inflection point here and I am a little torn.
Now:
In general, I think this market could yet go either way into the fall. Put another way, I can make an argument for both cases -- up into the fall and down into the fall.
While I have been short, I have great respect for the fact that tech has been so strong and is, relatively speaking, not that far off its May high.
From THE most basis technical pov, higher highs and higher lows, it is still in an up trend on the weekly out of 2002. While I was happy to short the rise into May, I am less confident now to hold. We have dropped a far distance outside of tech, setting up a potentially extreme bullish divergence here. (One only sees these after the fact. While the divergences are forming, one can not tell who is leading -- non-tech down or tech up.)
Hell, stronger than tech are the mid-caps, helped enormously by oil and gas. Of the top 100 mid-cap stocks, I wonder if at least 33% are oil and gas?
As long as the Jan/Mar lows hold, one can make a case for up into the fall.
ps: That TSX is still handing around its all-time high it hit in May and is sporting a triple top now. Ugh. |
