Trading Bipolar

The DEP may want to consider adding a dash of lithium into the N.Y. drinking water as the sentiment swings we’re seeing across equities may be diagnosed as borderline bipolar. One week it’s doom and gloom and the next it’s buy the dip. And then yesterday everyone suddenly lost all interest and just walked away leaving only me and a handful of steel rats propping up the tape.

Yes, I’m kidding of course. Actually this type of market behavior is pretty encouraging as it matches the characteristics of a bearish counter trend move. Of course there are never any guarantees and central bank machinations are always good for a hundred handles of pain when you least expect it.

However that said – as we are apparently sitting on an important inflection point I’m currently long the stronger index (ES) and short the weaker (the NQ).

That’ll have me pretty much delta neutral until one of them gets stopped out. So why not just wait until a break out happens? Well, that’s exactly the point – as my luck has it that big move will probably happen when I’m off benching at the gym or asleep at night.

Crude is back at diagonal resistance and I’m currently short. However I’ve put in a long position to take over above 34 as there is a small possibility of a surprise short squeeze here. Those energy shorts have gotten way too complacent as of late…

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There’s a bit of event risk today at 10:00am when we get the February consumer confidence report. Let’s see if that one may break the tie up here – would be nice to finally get this show on the road!