Traders wearing long pants should consider Short Shorts

We are cringing at the strength in the market before the Fed meeting. It almost seems classic that we are setting up to "sell the news". Breadth is solid and leadership is coming from the Semis. The market also is taking solace from a small decline in Oil and Interest Rates.

A market that is led by the Sox, while exciting cannot be totally trusted. The NAZZ can put on some noticeable points but sharp intraday reversals are quite common. We believe that many Bearish traders are covering short positions to obtain a more neutral position for the pending Fed news. This also feels like the relief rally that we were expecting. We were hoping for a better entry point to play this bounce but were not afforded one. Therefore, due to our overall short-term concerns, we will not chase the market at these prices.

In addition to the Fed news later today, the market will quickly shift its attention to CSCO and DIS after the bell. Perhaps a benign Fed and decent news from these two bellwethers would be the catalyst to get the Bears angry again and aggressively short any subsequent strength.

Only the most nimble traders should be playing on the long-side here with an extremely short time frame.

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