Was Tuesday the Beginning or the End…Back to the Macro’s
Yesterday’s rally in gold and decline in stocks is being heralded by many as the start of something. It would seem to me that it looks much more like the last hurrah for the funny money let us inflate out of the crisis crowd. The world has changed since August, the Fed is on hold and Europe is working on a difficult situation and in spite of all the talk is more or less getting it right.
So we are continuing with our macro posture that the October lows in stocks are in place and that was a place to buy them. The recent take out to the upside of the 1225 level on the S&P means that back-offs to the 1215-1225 area are buy areas. The trader shorts that we established on Monday in the 1253 area will be covered this morning. The fact that the financial ETF XLF is now becoming the leader means that it should have a significant place in your buying plans now. As such we are going to be getting back long on stocks early this morning, in a sense replacing the positions put on at the October lows and which we sold out as the former 1225 resistance level was being tested.