Top Line: As the market opened there was a pause when everyone seemed to look around and say there are aren't any sellers around. From there it was up and away with a giant move. We are ok, for now at least, with our short position. Why? Well...
Since you asked, we think the evacuation of all bears from the floor has left us very lonely. This is a place we kind of like to be. What do you expect from a contrarian? And, with that we need to say, we have our limits but the rally is nearly over. How do we Know? We don't but the evidence is still there and the volume is still low and the NASDAQ is outrunning the Dow. Don't forget that our FSI has now stalled, too.
These facts are pretty strong given you go back and read the earlier posts from the past few days.
Let's get specific. We are getting pretty interested in the oil patch. Oil has the potential to find a Top around here, $125. If we keep our eye on both the price of oil and the main oil stock index USO. Plus, we are watching XOM (Exxon Mobil) for possible ideas. We think the price of XOM is a big clue to what will happen to the price of oil.
Right now the price of XOM has tried to get back to the highs of April--so far it has not made it but we can wait. Lot's of downside is possible. We are taking our cue from gold which has started its descent, leading All commodities lower.
FSI: 95.90 (failed to make a new high)