The markets continued to dish out a little more pain today solidifying our thesis that it is  prudent to take some profits into strength.  We continued to sit on our hands today, although the digging and prying into potential opportunities has started to become a bit more intense as we suspect we are getting closer to what could be a tradable bottom after the recent weakness.

The suspiciously strong action we saw today in the small caps and the heavier, almost panic like selling as semiconductors sold off were the clues that had us contemplating that we may be close to a wash out and s turn. The increase in selling intensity is what we needed to get the sort of consolidation that will help us put in a bottom. .

The pockets of strength we saw lead us to suspect that buyers are still searching for opportunities and that performance anxiety may still bring about a flurry of buying into the close of the year. Technical damage has started to occur and the naysayers are becoming more confident now and are proclaiming the top has been seen. The strength in oil today is another item adding some boldness to the bear’s position.

At Shark HQ we aren’t ready to throw in the towel just yet and still believe that the heavy cash we have built up recently may quickly be deployed in the coming days. We closed out our hedges today and are getting prepared should Mr. Market decide to crank up the tunes for another round of ‘giddy up.’ 

Have a good evening

Rev. Shark