For those who have been eager to short this market, it’s tempting to try it here. The broad averages have made little headway since February, creating a toppy feeling that is about as subtle as seasickness. What better place, then, to lay out shorts than two days into a bear squeeze that has brought the Dow back up to levels where rallies have failed twice since May? And that is exactly why I am NOT recommending getting short at these heights: It just seems too easy. But the opportunity will look juicier with shares trading at new record highs, frolicking in the rarefied air above the impacted price bars of the last five months. If this should occur by mid-August, the bet will grow even juicier, since it could set up a bull-trap high well ahead of the October ‘surprise’ that too many traders seem to be expecting.
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I still have a 2225 target with ES. Remember, good news bad action, and bad news good action. Perfect illustration was the greek default fiasco. When the yellow metal didn’t nudge during the recent greek crisis (good news for gold but bad action) it was screaming that it is in a solid bear market and was going to sell off hard, sure enough longs committed suicide in an environment with no bids and the price free fell pretty hard.
The opposite seemed the case with ES, bad news but overall good price action as long term it still looks bullish to me. :/