Friday, July 9, 2010

Why to Fade the Rally

There are a number of indicators suggesting that this rally should be faded.

The equity put/call ratio was down to 0.61 today, indicating that this rally has been met with a good deal of enthusiasm.

Also, the junk stocks (e.g. clearly insolvent companies) that I follow were up hugely.

Usually, it pays to get short or shorter at times like these.

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