The S&P 500 Appears Unable to Rally – Why We’re Going Short Again

The S&P 500 Appears Unable to Rally – Why We’re Going Short Again

What a pathetic showing by the S&P 500.  It’s been completely unable to rally despite an extremely oversold condition.

Our original price target for the S&P rally was 1091-1123.  We rallied into the lower end of that range, reversed, and that was it.

When stocks can’t maintain a countertrend bounce (and also when that bounce occurs on low volume), we have no choice but to get bearish once again.

S&P 500 Price Chart June 8 2010The S&P 500 has fallen – and it can’t get it.  Are we heading off a cliff?  (Source: StockCharts.com)

So, we shorted the S&P 500 again yesterday morning via the futures market.  A modest rally from here is possible – that doesn’t worry me – this position should be a keeper for the intermediate term.

Stocks are primed to fall off a cliff…and we want to be short if and when that happens.

Short S&P 500 Futures June 8 2010

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