It's Hard to Trust the S&P on the Long Side Right Now

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I took last week off and I hate to say it, but I didn’t pay attention to the ES and NQ. I had a feeling the markets were setting up for a selloff and like I mentioned, the PitBull used to say every time I take time off — which isn’t often the — markets sell off.

But — and there’s always a but — when the ES closed weak on Friday two things happened.

The ES closed above the big figure at 4500 and even more importantly, everyone thought they closed weak after the index sold off 67 points from the high down to the session low (and then closed near the session low).

The PitBull asked me what I thought and I told him I couldn’t short a close like that. The main reason being that momentum-close trading doesn’t work enough and when it does, it’s like 10% to 20% of the time. The other 80% to 90% of the time, it’s a big fade and that's what Monday’s action was about.

Of course, it helps that Monday’s tend to be the low-volume day of the week and it’s hard to short days like yesterday — AKA when “thin to win” is in play.