Bulls are Drawing a Line in the Sand…..with update at 10:45 AM CDT
Yesterday CNBC devoted a lot of talk by various commentators concerning the 1255 area of the S&P and how much trouble the market will be in if that level is broken to the downside. Saying things like that is a lot like throwing magnets under the market. We continue to view 2012 as basically a sideways posturing year as the election unfolds.
Overnight the S&P rallied to an overbought level around 1300 and is now at 7:30 AM CDT is around the 1292 area. In order to maintain our trading view we will add to our short S&P above 1290, hopefully above 1295, then looking for a place to cover below the 1250 level, maybe 1215 if we get lucky, in the next month. Our position goal is to be 50 percent short if the sales can be placed.
As to the election in Wisconsin, it just shows where things are headed and what we have been talking about, the middle and lower class voters are voting their conservative ideology not their pocket books and that will eventually lead to a deleveraging washout and economic depression after the next election.
Update: Increased short positions in S&P to 60 percent of equity, market at 1307.80. This brings our add on shorts average for today to 1302.