Momentum is Gasping

Posted on Dec 8 2014 - 5:32pm by Sharpe Trade

For a few weeks now I have been commenting that momentum seems a bit tired on the stock indices, and then later … that momentum seemed fatigued.  That was back in November.

I’d just like to point out that the S&P 500 momentum has effectively gone nowhere in that time.

Just sayin’.

And I’m still seeing momentum studies pointing towards a loss of strength.  Larger names are rolling over.  Yeah yeah, I know … it’s December, and stocks aren’t supposed to fall in December.

But rather than go with “supposed to”, I like to watch what the market is actually doing.  And momentum is gasping at this point.  We haven’t held on.  And today, as I mentioned in my stocktwits stream, I put on a Yahoo (YHOO) short.  I have another short trade on stocks on at the moment as well.

No, I’m not saying the market falls another 10%, or anything like that.  Yes, I bought YHOO April 2015 50 Puts, but at the same time, I still hold all of my long positions in my longer term portfolio. I’m just saying that today the market looks weak and that I’m paying attention.  And that today, after about a month, I decided to do something about it by putting on a couple of short positions.  

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