Cordial Bear Market

This market has something for everyone!  It appears as though the bulls have had their chance to buy the blood and the bears will have a chance to reload their shorts.  Trapped longs have ample time to get out of underwater positions if they can just take the small loss.  Then the most bullish investors will again have a chance to find value in the next move lower.  Charts will look sloppier and weirder everyday and 5 years from now it will all look like it made perfect sense.  And around and around we go.

If there’s one thing this market is not lacking it’s opportunity.  The hard part is attempting to swing play the ranges without suffering a full decapitation (especially if you’re leveraged).  For the long-term investors my warning is that the market is only cordial for so long and you shouldn’t overstay your welcome in a bear market rally (10% and counting).  We are in the wrong year of the presidential cycle for any seasonal voodoo to bail us out.  The only hope is a Thanksgiving/Christmas rally to end all others.  I just don’t see the catalyst.  The back half of the year proves that mistrust, the sting of losses, and overall negative sentiment still exists among governments and large institutions.  The great de-leverage is still happening at the consumer level.  Once these issues of leverage and sentiment are resolved, it will be clear skies above and I will proudly be a bull once more.  I could be wrong, but I’m very cautious from here to $SPX 1230.

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