Covered Some Apple But We're Not Out of the Woods

I took advantage of the AAPL news overnight about plunging demand to trim part of a short position I have held with Members since a $165 entry. However, the larger point for me is that the Bank of England's action this morning smacks of desperation and genuine panic on the part of a major central bank. 

In my view, we are still in the fairly early stages of a full-blown sovereign debt crisis for the most developed economies in the western world.

One thing I have learned over the decades about bear markets is that when the news flow becomes something beyond run-of-the-mill recession, the bear market oftentimes aligns with the news in due time. In other words, just as 2008 had Lehman and the TARP bailouts, followed by a short-selling ban and eventually QE/ZIRP, the market eventually aligned with such epic headlines to crater in spectacular fashion. 

And with a major country like England already needing emergency action this morning I suspect we are well on our way to something epic with stocks too.

What does that look like, specifically? Well, let's see how fast the dominos start falling and let's see how quickly the various central bank begin to blink. But let's just say a retest of much lower levels from the last decade is not out of the question. 

That said, I do not expect Powell and our Fed to blink at all BEFORE a crash--For now he is sticking to his word about inflation and I only expect him to pivot if and when we see a total disaster much, much lower (i.e. below 2000 on the S&P 500). 

In the here and now, bulls are trying again for a relief rally. 3620 on the S&P needs to hold, while 3700-3720 remains the resistance zone above.