A Shorting Opportunity?

Goldman Sachs (GS) and Intel (INTC) have started off the earnings season with a bang.  I’ve had a ton of questions about earnings on my daily radio show over the past few days.  Many are asking if it will be some type of catalyst to push us way up or way down.  I don’t think you’ll be able to look at them as a whole.  I think when you have companies like Goldman Sachs & Intel reporting good earnings, you can’t say all companies will say the same.  There are plenty of companies like CIT which are having problems rolling their debt forward and are looking to the government for a life vest.  So, you’ll definitely have to look at each company on its own.

As far as the overall market, I’ve been noticing for some time that the up days are much weaker internally than the down days.  That’s why I had taken so many profits over the last several weeks and established short positions.  We were oversold in the very short-term but I think this is setting up for a shorting opportunity.  Don’t just go off of the index numbers to see if the market’s strong or not.  There have been plenty of days where the Dow is up over 100 points and yet the internals stink.  In order for this not to just be a trader’s market but a real bull market, we have to see more and more people jumping on board.  I think really what we’re seeing is mainly professionals trading this market and the average retail investor sitting on the sidelines.  You can see it in the internals and you can see it with the overall volume.

I’m continuing to trade around but not making big moves on the long or short side just yet.  If this rally doesn’t build steam, then we could go much lower, potentially to at least 800 on the S&P 500.


I’ll be on Fox Business Television this morning at 8:10 & 8:30 a.m. CST live from the Chicago Mercantile Exchange.

This post published at www.karleggerss.com

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July 2009
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