We all know today’s tape is boring and frustrating to both bulls and bears. Whether this turns out to be a healthy consolidation for another move higher, or rather a sign of a lethargic rally that will soon roll over, remains to be seen. Either way, it is crucial to be prepared. Below, you will find my top three long ideas, as well as some comments about where I think you will find good shorts, in the event of another leg down.
LONG IDEAS
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SHORT IDEAS
I could list all of the individual plays, but basically I would look to the high beta commodity complex to short, should we roll over. Another leg down from here would most certainly reignite the deflation fears, and you can be sure that all economically hyper-sensitive commodities will get pounded. In particular, I would look to the coal and steel sectors.
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Thanks Chess,
With regards to LSCC, how should we view the fact that it was rejected @ 5.27-.29 on the 21st and again at the same level on Friday?
TIA
Bernie–I would view it as still working through that triangle, which I drew with the pink lines. At that point, it was still neutral. Now, however, it broke out of the apex on strong volume. So, I would assign more significance to how it deals with that price level now, as opposed to before.