After the Vote

I thought of all the times gone by
And laughed aloud at the crimson sky
--Modern English

Domestic equity markets have been for sale since Tuesday's election. After Wednesday's 3% move to the downside (largest this yr), yesterday sliced another 1% followed by a rally attempt this morning that pretty much fell apart this afternoon.

Bulls have to feel uneasy at this end of week position. The indexes ended the week below their 200 day moving averages. While daily stochastics are starting to get oversold, longer horizon charts are nowhere close to oversold. Am starting to eye those June lows as a potential LZ.

Meanwhile, Treasury yields broke lower out of the multi-month pennant pattern. Perhaps July's all time lows are beckoning.

All of this looks like classic 'risk off' activity. The macro factors continue to wag the dog. Not only do we have the next installment of 'fiscal cliff' approaching here with all of its appendages (including higher capital gains and dividend tax rates), but Europe is once again gaining attention now that election is in rear view mirror.

Outside of minor trimming midweek to already modest equity positions, I haven't done much. Does increasingly feel like rallies can be sold. As such, may look for opportunities to add to my index short.

position in SPX