Today at midday, the broad U.S. indices are rallying strong with the SPY up 1.56% and the QQQs up almost 2%.
CNBC's Bob Pisani gave several "reasons" for the rally, some being that there's a belief the Fed will remain dovish, that ebola fears are waning with no news of it spreading, and rumors out overnight that the ECB "might consider" new stimulus.
From my view, the violent nature of price action in the indices the last few weeks signals that this will not result in another V bottom as has been the case during this 66 month bull run.
A sell off like we saw last week showed some forced liquidation. So the lack of that selling pressure this week produces these big gap ups and gains we've seen so far this week.
Now if this rally is for real and we're off to the races again, I would expect oil to rebound as well. But oil is sitting mostly flat on the day. This leads me to believe this is a reflex rally, and some sort of retest of last week's action will occur.
So with that I'm going long the inverse ETFs - namely SQQQ and SPXU.
Here's a chart of the SPY - click to enlarge.
CNBC's Bob Pisani gave several "reasons" for the rally, some being that there's a belief the Fed will remain dovish, that ebola fears are waning with no news of it spreading, and rumors out overnight that the ECB "might consider" new stimulus.
From my view, the violent nature of price action in the indices the last few weeks signals that this will not result in another V bottom as has been the case during this 66 month bull run.
A sell off like we saw last week showed some forced liquidation. So the lack of that selling pressure this week produces these big gap ups and gains we've seen so far this week.
Now if this rally is for real and we're off to the races again, I would expect oil to rebound as well. But oil is sitting mostly flat on the day. This leads me to believe this is a reflex rally, and some sort of retest of last week's action will occur.
So with that I'm going long the inverse ETFs - namely SQQQ and SPXU.
Here's a chart of the SPY - click to enlarge.
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