Stepping in front of a truck is essentially the near anyone contemplating a short-sale of the S&P or even a handful of momentum leaders, must feel. For sure this is a different environment, and fortunately we were among the few it seems, that had both the year's initial distribution, plunge, and March low .. all captured in our guidelines.

However we were emphatic about selling during a pre-pandemic and already overbought market of January, and vehement about buying when there's dire desperation such as the late March low. More recently we have had what may seem to new members as a more neutral view, after getting the S&P breakout into what I called an 'overshoot zone'.. above the yellow line in the S&P chart I will show again for those not recalling), with 'probably' no higher than 3800 for this phase. A bumpy road in 2021? Probably, despite prospects of growth for GDP, especially 'if' we see the Nation and world migrate into an 'actual' (rather than wistful) post-COVID era.

This matters because if we saw a dramatic extension possible we would say so (and do in some small stocks, not the overplayed pricey ones as even includes stocks that exploded higher in just the last couple days)...If that was predictable with any certainty near-term I'd say so, likewise a huge break that so many persist calling for (and continues defying them) is also not worthy of playing, because those small group of momentum stocks have buyers as the deer in oncoming headlights, if they misstep at all.

That's why I've cautioned about excess optimism, excess pessimism, and as it unfolds it turns out being cautious without insisting on huge transitions from one direction or another, has been an appropriate stance. Relative neutrality, at any given moment, may seem 'boring', but all we're trying to do is 'read the backdrop' as the market sees it (not necessarily the financial news media) for hints of what 'Mr. Market' wants to do next.

With a friendly Fed, a COVID Stimulus Bill probably unveiled any moment, it's a strange time to 'fight the trend', ill-advised to 'fight the Fed', and maybe not so wise to short anything, even though it's reasonable for fluff to be vented out of most of them (and some did even today). To wit, the really monster moves of this year are behind, both plunging downward or soaring upward (erratically at times), with no problem harvesting portions of gains in the big stocks, while

Hence 'don't fight the Fed' or the trend has remained appropriate, we got a Tuesday turnaround looked for, it's not dramatic, it is news-sensitive, and this is still a very expensive market with regard to the super-caps, but not so many others are that extended. Which means the market is receptive to stories. (SRNE)