This past week liquidations in the portfolio:
- Out of AVGO
- Out of JPM
- Out of NFLX
This past week additions to the portfolio:
- Purchased Z
- Added to TLT short
Currently long: COOP, EIGI, INTC, MSFT, PAYC, USB, Z
Currently short: TLT
While I believe the market is going remarkably higher over the next several months, there are very short-term setups on the bearish side of things that may prove too mouthwatering to pass up in the weeks ahead. There remains a good deal of alpha to be juiced in January from both the bull and bear side of the trade.
Just as the market carrot and sticked short sellers on NFLX on Friday with a seemingly alluring gap up on a weak open for the broad markets - enticing them to take the short trade thinking that the gap would be retraced, followed by grinding up the price almost all day - the same dynamic will continue to take place in the general markets.
Bears are salivating for an entry point, erroneously thinking that we have embarked on a secular bear market that has dramatic downside left. All indications point to bears being naive in their elementary analysis of the situation at hand. Their persistence will cause the markets to continue grinding higher, until they are forced to capitulate the secular bear theory at new highs for the major averages.
In the meantime, investors can take jabs on the short side, but the hooks and uppercuts should be saved for the long side of the trade until further notice.
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