Marketview: Kill The Shorts! FCX, EMC, HPQ, BK, C, BAC

The low on Tuesday seems like a good one for now.  Yes, we’ll pull back as we work off short term overbought conditions that come along with rallying almost 100 handles off the bottom.  It’s very unlikely we revisit 1070 in the immediate future.  The coming rally will most likely frustrate the bears as much as the last selloff frustrated the bulls.  That’s the way this game works; deke left, shoot right.  We could rally/chop higher for a couple weeks to a month before making new lows.  I’m not losing sight of the fact that we’re in a new, but probably less vicious, bear market.  I’m just following the signals the market is providing.

Also worth noting is that the market is moving in warp speed.  Moves that used to setup and digest over a week or three are now compressed into days or single sessions.  Just last week the safety/liquidity trade was on in a big way.  They dumped 54 handles from the Friday close before pulling a huge turnaround on Tuesday.  The bid (short covering) was for basic materials and the offer was for the previously fashionable safety/liquidity trade.  All upside moves originate from short covering, and this is no different.  Judging my the momentum there’s more upside in store.  Maybe because of the warp speed market the bounce will be compressed into just a week or two.  Time will tell.

Winners: $NOV, $FCX, $HAL $OXY, $EMC, $HPQ, $TXN

Losers: $BK, $C, $BAC, $GS, $MRK, $KO, $ETR

Both the winners and losers look decidedly bearish.  Last time both the winner and loser charts had synchronized bearish patterns we rallied an additional 7.1% after the pullback.



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