The Rally Everyone Sees Coming

While I admit I did take some partial profits in shorts this morning off the opening bell I am reticent to embrace the idea that an imminent, strong rally is materializing. 

True, you can point to some mildly oversold metrics coupled with elevated put/call ratios. But, as we hav noted with Members, bear markets have different thresholds for oversold conditions and negative sentiment than do bull markets.

And those goes triple for the data set most often bandied about on Twitter by folks who are referring to the QE/ZIRP bull run mostly since 2009. 

Thus, when many folks expect a relief rally to be sold into (e.g. Dan Niles on CNBC this morning), either we get a more durable rally than most expect or we do not get that rally at all. 

As I write this, the S&P 500 Index is dealing with 3700-3720 resistance above. If we can convincingly break and hold above it this week then I will become more open to a rally. Until then, I am still holding several bearish bets, including Treasuries, with profit cushion.

Also note HYG JNK back to red and not leading this bounce higher--In fact they lead the market down to new yearly lows last week.