Bryan Kautzman

Bear Trap Has Been Set; Now It's Time for Short Sellers to Enter

I think the lows we saw in November were not only the result of a lot of panic, but they also took into account a lot of scenarios that are now playing out. The markets anticipated a vastly shrinking economy. They anticipated a vastly rising unemployment.

However, the market also anticipated that things weren't going to get any better any time soon. In fact, back in November, smart minds were saying that there was a strong likelihood that the markets would fluctuate between those November lows and the resistance that has seemed to form around the mid 900's over the months since for at least a year.

I don't see anything to contradict this, so my strategy has been simple. Buy long when the S&P drops below 800, go short when the S&P goes above 900. Anywhere in between is something of a "no-man's land".