21Jun10:35 amEST

Attack and Retreat, Attack and Retreat

It appears we are still in the middle phase of the bear market, where many think the worst is over (this cycle, inflation and the dump in growth stocks) and it is easy to talk oneself into a major bear market bottom with the spike down and reversal in crypto over the long weekend. You may recall, however, that we saw similar "the worst is over" moments in 2008, such as with Bear Stearns in March '08, followed by the Fannie/Freddie fiasco over that summer. In neither of those cases, of course, was the worst over. 

Heck, even Lehman outright failing in September '08 was nowhere near the bottom of that bear market, as it actually came a week or two before an epic crash and about six months before THE ultimate 666 bottom on the S&P 500 Index. 

Having said that, as we head towards July 4th and the official start of Wall Street summer, bears may need to back off for the time being. If they cannot reverse back down tomorrow and Thursday with Powell speaking I have to respect this relief rally and likely stay away from new shorts for now. 

Off the open I covered up a MasterCard short with Members to lock in a solid win. I will certainly look to revisit MA on the short side this year. Other than that, I have not been pressing hard on the short side. But if this thing plays out like I think it could, that may very well change after Labor Day and I could even envision myself as short as I have been in years. 

For now, biotechs and solars seem most appealing on the long side. But even a name like Zoom Video, below on the daily chart, is trying to base down here and has been for a good while. Again, I am not a fan of calling major bottoms here. But perhaps a respite into July is in the cards. 

Bottom Line: Trading bear markets is often like a fencing or jousting match--Quickly attacking, quickly retreating, and focusing on surviving even with flesh wounds in order to mount a fatal blow to your opponent when the time is finally right.  

A Possible "Home Run" Trade ... Context for the Rest of the ...

 
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