Sunday Market Post 1/13/12- Just Being Careful



Charts look great, record  inflows into stock funds, hedge funds are the longest they’ve been in a while, and every hack has once again become a bull market genius because everything they buy usually goes straight up.

I think we could see a 1620-1650 SPX this year, but it wont be straight up and we are at some resistance here that bears watching. Just because we are at five year highs in the SPX (a couple handles shy), doesn’t mean it will stop on a dime at that number, but if we do overshoot the figure by 25-30 handles and maybe approach 1500, I have to believe we sell off 3-5%. It’s just the way it usually goes.

There are still many charts that look great, but we do have a lot of economic data this week. We will also see the rest of the big banks like GS, JPM, BAC and C report. A lot of good expectations are already priced into the XLF in my opinion, and although the bar is very low for a beat on these names, you have to wonder if a lot isn’t already baked in.

The market always looks for a reason to pullback, so this week could be key, especially if any data or earnings disappoint.

I raised stops last week and will be watching. I will be in for day trades, but before going all in long, I want to see where we go this week.

No one  ever said you have to trade all the time and I’ve traded small size like a piker the last few days. I’m just not in the mood to be “Corzined” by an unexpected mini black swan event, because they always seem to appear at market tops.

My worst case scenario for a pullback would be for a retest of the 50 day moving average around 1390, with 1425 being the first major level of support. See you guys in the chat room in the morning.


Bullishly cautious



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