Short and sweet tonight. Even turkeys can fly in hurricane “I-Lean The Wrong Way.” Reports that hedge funds, with almost no tolerance for short-term pain, have opened the biggest net short positions since early 2008 has driven a relatively low volume short covering rally. We even heard predictions of a 400 point drop in the Nasdaq if Mr. Ben didn’t announce QE3. We guess they were positioned for it and had a front row seat at Friday’s performance of the Nutcracker.
None of the issues that took the market down, mainly, worries over global growth and troubles in Europe have been resolved and it our sense Greece is about to come back on the radar in a big way. Notice in the charts below the U.S. indices that went down the most bounced the most. That’s not true in Europe, however, which had, at best, a tepid bounce.
If the S&P500 closes above its recent short-term high of 1208.47 we will reassess our position. Until then we remain on vacation. It was impressive to see Apple close the week strong after the sad news of Steve Jobs resignation as CEO. Great company, great stock, God bless, Steve Jobs. Good luck this week.