Fed Minutes Rally Playing into the Pros Hands

I found the “rally” yesterday a bit amusing in that it seemed so strong from a price perspective. And underneath the hood, some of the most explosive names from 2013, the ones that have fallen precipitously in 2014, tried to regain all of their substantial losses (many greater than 20%) in one day.

But days like that happen often in bear markets. If we have seen the peak for US equities, then days like that will again happen. Also under the hood the volume was lighter. Prices crept back to levels where, on many stocks, heavy sell sequences occurred. If this is indeed a low volume (early) bear rally, then amateurs have played right into the Pros hands – giving them a better price to sell (or sell short).

I’ve said this before and was wrong (and don’t want to discount the power of the BUY THE DIP mentality) – but I think in terms of odds – and try like heck not to care about being right (I am working hard to relieve myself of a lifelong need to be “right” or “smart” about something all the time).  Therefore, as Peter Brandt often says, “an opinion is not a position.” And here, I am making an opinion – I may test a position idea – but I am not committing myself fully, nor my or my clients’ funds fully to this idea.

Just something to think about – just another possibility…