Stocks are experiencing a post-terrorist attack 'snap-back'. Prices reached a slight new low for the recent down-move on Sunday evening/Monday morning and have since risen sharply, recovering most of the losses of last week. We did not use the dip to cover any shorts, as we had suggested we would try to do in Friday's edition - we missed it. We might be tempted to re-sell at current levels, as this has some of the characteristics of a short-squeeze that will probably fail, but have no ammunition to do so. The open profits on these four outstanding short positions (S&P, CAC, IBEX & MIB) have all but evaporated and we always advise not letting a profit become a loss so instead of re-selling we would tighten protective buy-stops here to avoid an outright loss. There are some intra-period top extensions appearing now (see next chart) so the rally may not last much longer but there is always the risk that this is the start of something more - we are not going to be stubborn.
Copper futures have fallen recently (we covered too early) and have now made a bottom extension. Buy some: