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Of my portfolio holdings inside 12631 ATPG FST (will sell before earnings on Monday) and SLV are acting the best. Indeed, my thesis of playing technically sound charts that are heavily-shorted in order to punish numerous bears leaning the wrong way is coming to fruition. The issue going forward is whether this continues. Given the chart setups, I am inclined to say yes. However, given that I expect the market to come to terms with the 200-day moving average on the S&P 500 for now, I believe there is going to be a premium placed on stock selection over the next few days.
As for the broad market in general, we are putting in a rather dull session so far. This type of action is the main scenario that traders fail to recognize as a distinct possibility when they aggressively short a market that has been a huge run up–The idea that benignly pulling back or going sideways barely makes shorting worth the effort. The Halloween power period may have also come to pass, but simply consolidating up here is likely a win for the bulls. The 1260-1280 area should be viewed as our short-term consolidation zone, and the bears have a lot of work to do to get reverse some of these confirmed inverse head and shoulder bottoms that I am seeing on plenty of daily charts.
