Risk on Buyers not the Sign of a Healthy Market

Yesterday’s buying in gold, stocks, and Euro all at the same time is not healthy for anyone but traders.  This just confirms that our recent comments about the rest of the year being a price distribution period is on target.  Since August we have seen the S&P go down to 1070 and then rally to 1290, that’s it for the year. 

I have been hoping for a change to a healthier market environment and a more cohesive approach in Washington to bring some solutions.  It seems, however, that old thinking and policies die hard.  If we had seen moderation yesterday, stocks up a little, gold lower, we would be setting up for a decent outlook for stocks.  But now the market has set itself up to a precarious situation, it is long everything when interest rates are starting to tick higher, it almost feels like Rick Perry is in charge of the market.

As to market actions today, we are still basically long the financial ETF XLF and out of all other stocks.  Today if we don’t have to trade in a vacuum we will buy the short tech ETF SSG to lock in our XLF gains, plus we generally like being long finance and short tech for the rest of the year.