Taking Some Off the Table

  • Profit booked on SPX500 short
  • USDCAD short looking good
  • Euro break exposes more upside

PROFIT TAKING - So I have begun to square up positions into year end. On Monday, I took a sizable profit on my short SPX500 position and was also able to bring up my average cost considerably on my USDCAD short. I am still holding a very small portion of the SPX500 short and will be looking to either sit back on USDCAD, or take another shot at selling into another rally in the sessions ahead. This higher USDCAD goes in the sessions ahead, particularly ahead of tomorrow's FOMC, the more compelling the short-trade at such elevated levels. I continue to like stocks lower in the weeks ahead, and If we do get another SPX500 bounce into the 2050-2100 area, I will happily sell back into it.

HIGHER EURO? - Moving on, another interesting development on the price action front was Monday's push higher in the Euro. Despite pullbacks into the daily close, the upside break is hinting at the possibility this impressive correction of the past several days, still has more to go, with the break potentially exposing a move all the way back towards 1.1300. Ultimately, this is a market confined to a broader downtrend and at any moment, we could see a resumption of declines. But at the same time, I think we need to still consider the possibility of more gains before the market finally relents. Clearly, a lot of this could be dependent on what the Fed does tomorrow. But with so much of the Fed already priced in, will the event end up being anticlimactic? Let's see.

With so much of the Fed already priced in, will the event end up being anticlimactic? Via @joelkruger

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