Should You Be Freakin’ Long Here?

About a month ago, David Tepper, famed hedge fund manager, sparked “fear” in the market when during a SALT conference interview he told people to not be “freakin’ long here“. Of course, after a ~5% rally in the markets, Tepper told CNBC that his chief market concerns had been “alleviated.” Now, I’m not here to bag on Tepper. I think he’s a smart dude and to be fair to him, he’s a long-term macro-guy. But when he said “don’t be so freakin’ long” back in May, he was a month early. After a multi-month consolidation and correction, being pretty long in May wasn’t that bad of move (and yes, hindsight, blah blah).

But right now? I’d be worried if I was establishing new, heavy positions here or if I was already really long. Why? Just one technical reason. Let’s take a look at the chart.

Here’s the $SPY. You can clearly see that price is testing the higher part of this channel. Now, this doesn’t mean we can’t breakout and go higher (especially since RSI is only in the 60s), but if I was pretty long here, I’d be looking to hedge and/or reduce risk soon. It’s very likely we just trade sideways and work off this “overbought” condition and move higher (once again). But given that sell-offs happen sharply and unexpectedly, I wouldn’t be so “freakin’ long” here.

$SPY – SPDR S&P 500 ETF

SPY weekly

 

Tags: $SPY $SPX $DIA $DJIA $SSO $SDS $IWM $ES_F

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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