They’ve tried to tag Dow 12,000 and S&P 1300 for the past few days, but at the moment of climax, the indices start to seem tired. We’ve taken the portfolio approach off the table for the past week and half, as compelling core trades macro trades seem hard to find.
With all the news in Egypt and the continuing problems we have around the world, it’s prudent to be cautious after the monster run we’ve seen. We’ve all heard this before, but today feels a bit different, like it could be the start of the correction. The sloppiness in the charts we saw last week and early this week were a definite sign that the foundation was cracking, and the resulting pull-back is often a delayed reaction.
I am not going to pile into shorts, but caution is the keyword here. This morning, Gold held yesterday’s low and it seems like some money could rotate back into the precious metal as people get fearful again. Although it is a Friday and snow is still slowing things down in the Northeast, it will be interesting to see if they don’t come in and “save the day” this afternoon.
Now that being short is embarrassing, it might just work out. That’s how market psychology works.
*DISCLOSURE: No positions
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