Bulls Find a Way To Squeeze Shorts

C’mon, make up your mind Mr. Market! You pine away for lousy economic data to get an interest rate cut. You then get good data suggesting no interest rate cut, and then you rationalize that you can have both. It can get downright perplexing.   

But with light volume selling the past two days, it’s not surprising that bulls found a way to squeeze shorts while looking for any opportunity to start the Santa season. 

Paulson is in the batter’s box this afternoon with subprime bailout news, employment data Friday is next and then the Fed decision on Tuesday. It should be an interesting few days of trading. Market internals were good - but not spectacular. 

With better economic data Wednesday, the dollar caught a pretty good bid: 

The choppy action continues. It wouldn’t surprise to see a broader rally begin to unfold even before the Fed meets on Tuesday. 

Disclaimer: Among other issues the ETF Digest maintains positions in: UDN, GLD, USO and IEF.