Market Recap: The Grouch Trade Killed You Today

Got Smoked Today

The Reformed Broker, AKA The Scotch Bonnet, here with today’s Market Recap…

Today’s rally was yet another face-ripper in a series of rip-your-face-off rallies.  You only get these type of up moves in a brutal bear market, so enjoy the fireworks for as long as they last.

You had to be long and strong from the open if you wanted to play…the hedgies are said to be at their lowest net long exposure since that data began to be tracked; that chase higher at the close today was most likely equal parts short-covering and “I don’t care, just get me in” buying by the funds that don’t have enough long exposure.

The “grouch” trade, once again, killed you.  84% advancers vs decliners on the NYSE, but the depression and fear plays didn’t just lag, they sold off.

Here are the stats:

Up 250 on the Dow, but no love for the Cigs, Adult Education and Gold crowd?  Ouch!

Nouriel probably left his computer early today to catch a movie…either Fast and Furious or I Love You Man.

I will say this, for most of the move up in the markets that began in mid-March, almost every commentator came on TV or in print and said, “Its a bear market rally, won’t last, can’t continue etc.”, but today for the first time, there seemed to be a handful of fairly thoughtful people talking about this rally signifying something more.

The trader in me couldn’t care less if this is a bear market rally, a new bull, a short-term top or whatever…I’ll play what I’m given. The American in me, however, hopes that we can get through earnings season without giving up much of what we gained this Spring.  My “hope” and a MetroCard might get me on the subway…LOL.

My longer term outlook?  Even the hint of earnings improvement for Q1 2010 over the numbers we see for this year’s Q1, and I’ll drink the “early March was the bottom” Kool-Aid…but not until those hints come. Gonna be a while before we get that visibility, so my finger remains on the trigger at all times, buys and sells.

Tune in tomorrow for TGIF!

Full Disclosure:  I currently manage accounts that are invested in Gold and the Gold Sector.