We’ve seen one Hidden Pivot rally target after the next demolished in recent months, even if some of them withstood the battering for a while. Now, for the record, we proffer yesterday’s 1519.00 high in the Mini-S&P as yet one more such enticing opportunity to get short. This we did, late in the day and with no great expectation of getting rich -- only of picking an entry spot that might afford us the luxury of bucking the tide with relatively little risk during the parabolic blowoff stage of a 25-year-old bull market. (Note: An hour after we initiated the short, it was possible to partially cover the position nearly five points below the entry price; this we also did. One further note: If the futures go on to exceed 1519.00 by more than two ticks, you can bet that they are bound for at least 1545.00. Jot that number down by all means, since it promises to be every bit as short-able as the one that has so far stopped the most recent surge. )

By shorting a runaway bull, aren’t we just beating our heads against the wall? Well, yes and no. The bruises do accumulate from getting stopped out each time we are wrong. On the other hand, with some judicious profit-taking, we’ve generally made money at it, and this has turned would-be pain, if not into pleasure, at least into something approximating smug satisfaction. It certainly beats sitting on the sidelines, agreeing with our like-minded friends that, any day now, the bulls are going to be CRUSHED. Face it, guys, the burden of proof is on the bears right now. But rather than belabor the thankless and well nigh impossible task of proving it, why not just simply enjoy the party? Remember, because we tend to be short rather than long we are hangover-proof whatever morning brings. 

So what about the parabolic blowoff? We have commented here before on the seeming paradox of such a thing occurring at a time when the U.S. economy is threatened by a housing bust that could trigger a full-blown depression. Not that Wall Street would allow such a trifle to get in the way of the millennial asset orgy now in full swing. Financiers and leverageurs have been so busy rolling up eight-, nine-, and even ten-digit fortunes in the LBO Ponzi-game that one can hardly blame them for remaining oblivious to the steaming fissures in the economic landscape all around them. One day those fissures will belch fire -- oh, yes, they surely will -- and then, we can be sure, the deal-makers will notice. More than notice, actually. As F. Scott Fitzgerald once observed, the rich are different from you and me – they have more money. Indeed. But also more leverage. Catastrophically more, as is destined to become perfectly clear.