Old State of Panic Moves to Glee: Getting Short or Hedging Gains in SPY, E-minis and Crude Oil

The recent rallies in Crude Oil and Stocks have completely cleared out the short-term memories of many traders. While an article of mine from just two days ago indicated that those with cash on the sidelines might put some of it to work, the rally of the last two days may provide an opportunity for pause. Like all commodities, including Crude Oil, the Stock Market, as represented by the E-mini S&P has a tendency to trade with hyperbole and cause the casual observer to believe that there is no rhyme or reason to its movement. When too much money is following a trend, there seems to be a reversion to the mean. While this is a pretty general comment, make note that trends can be very difficult to find and many traders end up getting long or short at the end of the move.