As temperatures top 90 degrees on Wall Street, Goldman declares shorts season. But the Fast Money pros think longs may be more appropriate.
Of course the heat wave sweeping NYC is coincidental. When Goldman talks about shorts – they mean selling short.
And selling short is exactly what they recommend after the latest data from the Philly Fed called the recovery into question. “This morning, the Philly Fed print of -16.6, down sequentially and worse than expected, provides further evidence that weakness has extended into June,” write Goldman analysts.
They go on to say that without any kind of QE coming imminently the market will be forced to trade on economic data, which appears to be deteriorating, especially overseas.
Goldman is looking for the S&P to sell down to 1285 – sliding about 5% over the next few weeks.
And while Goldman sells the markets Fast Money trader Brian Kelly is buying. In fact Kelly, who is founder of Shelter Harbor Capital, thinks selling the market at current levels is exactly the wrong trade.
Kelly sees plenty of upside catalysts in the near term - not the least of which is his belief that the Fed is ready to unleash some serious firepower. In support of his thesis he says just look at the last sentence of the Fed statement. (It says “The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
