Short Next Bounce

Bulls getting drubbed today, as Fly reiterated the calendar shift and subsequent manifestation of his many, many warnings. I’ve written about the tepid May outlook here and here, and have looked into some lower beta parking spaces and a potential rotation into the airlines to ride out this storm (was early to this rotation, today looks good, could be a place to hideout). Again, the indices have covered a lot of ground since mid-February, and with the laundry list of bear theses floating around, some credence should be warranted to those perspectives. In the cyclicality of this multi-year bull run, bears need moments to be engaged and feel winship, if only fleeting. Many headline risks have been floated about casually and viscerally throughout this run. The running trend has been: insert fear-driven, sell-inducing, bear-parading thesis here __________________. Fear needs to be packaged and stocked on aisles for market participants to gobble up. It’s not a war if there’s only casualties on one side.

As the week progresses, I think this weakness will turn into a bounce of sorts that should be your spot to snag a short. Russell leading down today is not a good sign. Use a chart and do some price level voodoo (I do!). May should kick out the hedgies to the tune of a ‘good riddance’, go away and stay away. I doubt they will be bailed out with a May run-up to sell into before departing for the Hamptons, especially given their ineptitude and underperformance; should be a salt-in-wound rubout. With presidential election implication chicanery, June rate discussion (hike unlikely), Brexit referendum, and any number of bear thesis to be rolled and avalanched at market participants, the road should be bumpy. By mid-June through the summer, we should get for some great trading conditions (sign-up for OA’s Boot Camp to arm yourself with a plan for rotation/picking stocks), just enough to screw with the Wall Street vacationers, induce FOMO, and lead into a bumpy Fall in time for the elections. Again, this is merely a mental exercise exploring a possible map scribbled in the schoolyard with chalk on the stray hypodermic needle riddled throwback pavements of Brooklyn (home).

In the meantime, I’ve moved into $AAPL on Friday, $WFM yesterday (impending earnings this week, not sure if I’m holding) based on a discussion of some of the potential movers in this space I shared yesterday, $TEVA (multi-week support, earnings next week), and in a similar space to the great call by Raul on $MNK and some $UAL (already long $DAL) today. I’m still holding $TLT, and am getting poleaxed in solar (long $SPWR, $VSLR added 2^nd half today, $SUNEQ), some long term housing stocks (long $TOL and $BZH), and of course the penile-guillotine $TWTR. I’m about 40% cash. (I share all of my swing/positions trades realtime on stocktwits/twitter. See the running trades here.)

Stay nimble.