Avoid the Chainsaw

I have been laying off the short side largely due to the small caps holding recent lows, and the market exhibiting signs it wants to finally hold a relief rally.

I still suspect better short entries await us in the coming days. But first we need to see how the market handles this bounce.

Ebola plays are on my radar and in my book on the long side.

And the CORN WEAT soft commodity plays are there, too.

But if you are an over-eager short, you wanted to see this morning’s weakness beget more weakness, not another upside reversal.

For now, it is wise to avoid the chainsaw of a short squeeze rally.