Transition

Continuing on with yesterday’s Flexibility theme and our post of last week outlining a potential move in the markets coming up, I am taking the flexibility position to a possible extreme with a short position in SPX and NDX this morning. This is an embrace of flexibility around technical relative strength indicators which have the market on a precarious level at the moment.

Flexibility is key now, we have been in a transition period since Nov 9, we have had two down moves and now the market is flirting with turning up, I am going to fade the turn today with outright shorts in SPXS and SQQQ. Backing up the overbought technicals are three weeks of inflation and production reports coming up, as well a FED meeting where a 50-point hike is being talked about. I think we have lots of time before the Bullish theme takes over. That is not to say that there are many more outcomes possible that we have not outlined yet. But one day at a time.