Hold Your Fire!

With the third consecutive gap up in the market holding firm today, there are plenty of premature shorts no doubt starting to feel the heat. To be sure, shorting in any type of market amounts to "adult swim, in terms of the agility and discipline required to avoid getting whacked for a big loss. 

But beyond that, the rally in stocks seems to be ignoring a few divergences at the moment. I am looking to see if and when, for example, the strong and risk-averse Japanese Yen will affect stocks for the worse. 

On the daily chart of the Dollar/Yen cross, below, note the anemic bounce today, as the pair is still well below a massive, confirmed head and shoulders top. The Yen is certainly not indicating a new bull run in risk assets its imminent. 

Overall, the current market bounce is highlighted by the likes of GPRO and its ilk enjoying snapback rallies, which many traders were expecting to happen a few months ago. The action in leaders like the FANG names is decent but not overly-impressive beyond a sharp relief bounce. 

I have a close eye on the gold miners for the rest of this week for potential fresh entries on the long side if they hold up. 

But regarding equity shorts, I am holding my fire for now until I see some concrete signs of the rally actually losing steam.