Tuesday 22 January 2013

Higher High Ahead

SPX at five year high. It seems there is no respite for bears these days. Lots of talking heads are calling for the Top and in various daily trade forums folks are discussing all obscure indicators to justify talking shorts. But I have bad news for the bears.
Its still too early for the top and higher high is ahead for indices.
One of the indicators I would like to share today is the short interest.

(H/T :Schaeffers)
As you can see, the short interest is still high and there are still good deal of short interest out there which will be taken out by the BOYZ in the coming days. It is like low hanging fruits for them. As SPX comes closer to 1500 and may be struggle a bit, folks will pile on the short side and then BOOM! SPX well past 1500. Till short interest capitulate, the market will keep grinding higher.

Schaeffers talks of lower trending or higher trending short interest but I think at this point of time, that distinction is more academic.

While I would suggest not to short the market at this point of time, I would also not suggest to be aggressively bullish. We are long on selected stocks from start of January and most of them are doing fine. Like everyone else, we have not had the chance to add more on weakness but at this point, we are holding on to our long position. I will email to subscribers as to when is the right time to harvest the gains.

Our positions in PM are doing well, (praise the lord). While Gold is struggling to break through $1700, once through the gate, it will most likely run away. Silver will also follow.

So if you are long, enjoy the ride up. Other than that, there is nothing more you can do in this market. This is a repeat of 2012 and therefore play accordingly.

Good luck trading all.


  1. The last Jan felt like opportunity is slipping farther and father away, this Jan feels like a very nice opportunity is just around the corner.