Too Many Bulls in the Room
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On one bullish/bearish table I compiled at the end of day we actually ran 'short' of bearish names, an unusual occurrence and one that I take as a warning sign for 'frothy' action.
Futures are currently down 21 points, but I assure you this is not Monday morning quarterbacking. One desk note I saw today suggested that market moves are getting more extreme both up and down due to traders who are lack conviction 'chasing' moves and I have to agree. After unusually strong returns in 2013 for the broad market, 2014 is a different beast and investors and traders are trying to find their footing.
Bullish flow can still be a good sign, but I'm likely to assemble trades in the form of an outperformance bet rather than outright long for a while. SPDR S&P 500 (SPY) and PowerShares QQQ (QQQ) and the sector ETFs make this an easy task.
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