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I could present dozens of charts to you this evening that show what should be bullish consolidations of stocks coiled up and ready to ramp higher. A few examples would be KLAC MA TER TLEO V. Seasonally, we are close to entering the bullish holidays, where shorts tend to ease off the accelerator even in the most vicious of bear markets. Beyond that, the bears have fumbled the ball countless times in recent weeks when attempting to push us back down into that summer trading range on the major indices.
With all of that said, this market is going nowhere unless some buyers of conviction and size start to make some bold bets. All of those pretty charts will not amount to much if the aforementioned potential buyers have the heebie jeebies for whatever reason, be it Europe, the Euro, China, the price of oil, etc.. I realize that we could simply drift higher here without volume, but as you have been witnessing for yourselves over the past few weeks we could just easily go sideways.
I am currently net long and have been crushing several trades inside 12631, such as BSFT and FIRE. My sole short is AAPL which, frankly, I would not mind getting stopped out of, due to my long positions. However, the AAPL trade fits perfectly into my style, with earnings and major headlines out of the way, sentiment for the company and stock still wildly bullish, and several technically compelling reasons to go short. It is tough to imagine the market rallying into the holidays while Apple sells off, but perhaps it is that type of thinking that makes it even more strategically correct to short the stock here.
Apart from that short, I am actively looking for longs, especially if the bulls can truly get their acts together. For now, though, the market is stuck in the dreaded “friend zone,” doing all the heavy lifting that a long-term relationship (trend) requires, but not getting much action. The bulls could use a pep talk like the one below.
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