Bulls in Control, But...

If you have been following along you will notice that we have become increasingly concerned with market action lately. We had mentioned last week that we would like to add some short hedges. Our reasoning on this issue has to do with decreasing breadth as the market has moved higher. We frankly don't trust this move. Nevertheless, momentum has been picking up on the upside and while we believe that this latest bullish market move is on shaky ground and not to be trusted shorts are likely going to get burned unless they have deep pockets. There will be a time that this market needs to be shorted, but it is not quite here yet. In fact we could be moving toward a blow off type move, which will suck in a lot of retail money before a real correction ensues. There is no reason to be afraid of this market and money can be made on the long side. We just want everyone to keep in mind that the foundational structure that this move is building on is not sound and we want everyone to be prepared to switch sides of the tape to the short side when it does become necessary to do so.