It’s pretty simple. The US market is about to gap up to start the year, and it will be right at short-term resistance if/as it does so.
S&P 500 Futures…
So the question is, do you chase this potential suck in or do you wait it out? I choose Thing 2, as I am only short XLF (against several remaining longs) and also long Treasury bonds (which are about to get zonked).
I am at the moment, built to be balanced. I’ll change that if the market instructs that Trump Mania part 2 is about to foment. But the chart above does not inspire confidence in that outcome… yet. If the inauguration brings about a new round of animal spirits, I plan to be a nimble trader from the bull side. The S&P 500 target is after all, 2410. But then I’d be prepared to get actively bearish within the next few months.
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