I have been talking about the market moving up into territory that is ripe for considering a short play. I continue to believe this, however I am not going to just blindly get short here without considering market conditions. I will wait for a signal before I attempt to simply pick a price.
The S&P 500 is approaching the highs that followed the flash crash from may 6th. In overnight trading, the ES actually came within 3 ticks of the post crash highs of 1165.75. Dow Futures or the YM has already traded above its post-crash high of 10,792 and is currently trading 1.5% higher. Dow has been trading above since 10/5. The Nasdaq is also trading above its post-crash high and has been doing so since 9/20.
On that note there is no reason to simply assume the S&P is not going to continue above that level as well. After the weaker than expected jobs numbers from last Friday, a common belief is that the Fed will implement stronger quantitative easing going forward. This is typically positive for the stock market. So shorts beware and be very careful entering any sort of swing short position.
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