Tuesday, April 18, 2006
Short positions by those who prematurely bet on a breakdown are likely to add fuel for a snap back rebound. We believe that this market is going to provide a shorting opportunity very soon, but it will be shortable once it reaches back near recent highs. Shorting breakdowns is usually a recipe for failure and we believe that will be the case here. The put:call ratio is back in overly bearish territory so support should be in place very close to current prices.