Baby Bears Buried for the Day

If we are, in fact, going into a full-blown bear market this year, or at least a deeper correction than what we have already seen, then today's price action amounts to being a mere appetizer of what is to come.

Specifically, what we preach inside Market Chess Subscription Services is the concept of being savvy, nimble short-sellers, in lieu of a dogmatic one--Think back to the mortgage bubble last decade, where plenty of shorts nailed the thesis but were either too early or simply got caught leaning too heavily-short into one of the many rallies. 

Ironically, bear markets often feature some of the most vicious, violent, spirited, and dangerous rallies in all of market history, sporting jaw-dropping single session gains. 

So even if this is the early stages of a new bear, steadfast shorts with conviction had better get used to days like today. 

We are playing along with the rally on the long side, via the TQQQ ETF, the ultra-long QQQ instrument. But you can be sure, given the overall technical damage sustained in recent months, that these are dates and not marriages. 

Also note the EEM, emerging markets ETF, below. 

On the 30-minute chart, we can see the uptick in sell volume this morning after a very strong downtrend. This may very well be some type of short-term washout, meaning sellers are dried up and perhaps we now see those emerging markets breath a sigh of relief, if only for a few days.