A lot of shorts got suckered into yesterday's fade. Before the close we posted:
As we wrote in the newsletter this weekend, we would short the first test of the 200 SMA but buy the second. Yesterday was the first test of the 200 SMA which offered great opportunities short at SPY 111 and today was the break-out. As we wrote yesterday and today, we like the market long but we do want stuff to set-up, something that is not happening due to the quick nature of this rally. The best thing that could happen now is if we stay above but close to SPY 111 for a day or two and set-up some nice longs.
Everyhing these days happens in fast motion: we go down quickly, we go up quickly. This market is making daytraders out of all of us (well, we are mostly daytraders to begin with but for the rest of you!).