“Things That Make Me Go Hmmm…”

For some time now, we have been keeping our big picture concerns on the back burner, letting them simmer as the short-term tactical rally played out. Our “hope” has been that the rally would prove to be strong enough, and broad enough, to fix all the long-term issues, such that the next short-term oversold condition would unfold into a healthy, trend ready long-term structure.

Alas, as evidence begins to mount that the short-term tactical rally is losing steam, we must accept that idea that the big picture is still broken. Therefore, the next short-term oversold condition will take place in a still fragile long-term environment, not one we want to be complacent about. 

We are reducing our swing trades while reintroducing short exposure. While nowhere near as defensively positioned as we can be should the evidence warrant such action, all big declines begin with small declines, and given the environment, we want to respond at the margin.