Shuffle Up and News

The fast-paced news cycle we have seen for a good while became saw more rapid-fire headlines and reactions over the weekend.

As it pertains to markets, that may very well have been good enough to ignite some long overdue profit-taking and pullbacks in those stocks and sectors which had simply ignored any notion of a modest reset since the election, even if the pullback eventually leads to a new trend higher. 

While it is easy to assign any price movement to a given political headline, in reality the banks, steels, and other sectors were ripe to see shakeouts at any moment given their steep moves higher since late-last year, followed by sideways action as the small and micro-cap indices began to notably lag. 

At issue now is where and when this pullback today. Bulls have grown accustomed to stepping in immediately, within a few hours at times.

But we are also in a tough seasonal period for stocks, during these next few weeks. Moreover, we have our first FOMC this week during the President Trump era. And despite the narrative being told regarding the opposite to Trump, the main event may very well be between Ms. Yellen and The Fed versus Trump, which could easily be put to the test this week with the market as a worried intermediary. 

As a result, new longs are on hold until we see dip-buyers revive their old magic. Some select plays like DGLY are surging on news of winning a big order. But for every one of those, there is a blow-up in the likes of FIT which has no bottom in sight. 

On the short side, we have a few ideas in motion for Members. But you can be sure bears are going to need to do better than a solid morning of downside action to send the VIX back to corrective levels for equites.