Straight Up: Yesterday’s Disappointing Market Turnaround

Lucky 7: My Best Performing Shorts Today

It has become quite evident that anyone who dares short this market needs to adopt a “smash and grab” attitude and simply cover whatever positions they have during those rare instances (like last Thursday) when the Fed briefly loses control. The fact we’ve soared about 2,200 points in 36 hours based on absolutely nothing proves that.

YM Chart

YM Chart

Chatter (once again) about a trillion-dollar infrastructure bill is pushing equities higher and smashing bonds, since a nation addicted to endless trillion-dollar programs is looking like an increasingly worrisome credit risk. The bond futures have fallen hard over the past 36 hours:

ZB Chart

ZB Chart

Thus, virtually the entire rout from last Thursday has been laid waste. The have just about returned to their neckline.

RTY Chart

RTY Chart

During yesterday’s disappointing turnaround, I had trimmed my positions from 75 to 40 and likewise trimmed my exposure from 150% to 80%. I am thus entering the day relatively light and, frankly, feeling an awful lot like Sisyphus.

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Tim Knight

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