Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
As stated earlier, despite the equity rally yesterday bonds and dollars held in. Today they are rallying some more – even as the dollar is looking parabolic (currencies usually don’t move like this). Until these two “risk off” names reverse it is very difficult to believe in this market for any period of time other than the dead cat bounces. One can try to time those dead cat bounces but it is very difficult and you tend to lose fingers trying to catch the falling knife – and you are usually just trying to make up the losses from catching said knife during the bounce.
As everyone who has traded markets the past 4 years knows there *will* be a stick save by the authorities. The question is when and at what level in the market. It doesn’t help to know this fact – even if there is a 30 point S&P rally that day – if it happens 100 S&P points lower from here.
So until then, it’s difficult for bulls (for obvious reasons) and bears (since at any moment the authorities can show up with their white knights). An easier environment will return again eventually. I can “envisage” it. 
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
