Yesterday, just before the open, to help allay any confusion about what the market would do and how to trade it, we provided the perspective of the biggest fade in market history, Dennis Gartman, who was quite bearish.
Clearly we wish that we had had the presence of mind to have been aggressively net short of equities, but we did not, nor are we that lucky. We shall, however, look upon any intra-day rally in the market as a point at which to become modestly shorter of the market. That is, given the range thus far with the low in the S&P futures just below 2000 in early trading, and given that the futures are now 2015, this is sufficient to sell into to become slightly net shorter of the market. This shall be especially worthy of selling into given that the futures “gapped” lower of course and given that the “gap” has been closed on this modest rally from the lows.
As we further said, “we note this just in case the BOJ needed one more reason to buy a few yards of USDJPY and send the S&P right back up to 2100.”
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