Weekend Analyst: A, In-Week Trader: C-

The title is about right from my perspective. I feel that NFTRH has either nailed important moves in the stock market (not down to the day, but in the preferred macro orientations well within reason, timing-wise). Yay me! Right? Well, half right.

The guy who writes NFTRH has the majority of a whole weekend to set things straight and present a clear picture to himself and the people reading the report. The market is analyzed from many different angles to distill a preferred view; and today’s little bear fest is well within the preferred view.

But the guy who spends all weekend working sometimes has the interruptions of daily life during the work week. Today Mr. Mom was called to duty. It messed with my ability to be at one with the market. An excuse for less than stellar trading? Yeah, sure.

But there was no excuse for not getting short enough yesterday, which was not an interrupted day. I shorted the big gap open on SPY, which is my largest position. But I was also forced to cover 2 short positions to manage risk. Also, in today’s hindsight, I wish I had taken more long profits. I took a fair amount but my all too human greedy side told me to hang on to others (and I even bought GOOGL despite NFTRH’s negative relative views on NDX).

So as a trader I am never that great, and surely anyone subscribing to NFTRH should not do so expecting a trading coach, only the best grade A macro market analysis out there. In these bear phases, I – a player whose dominant theme is and has been bearish for some time now – sometimes feel like a Keystone Cop. That goofy guy on the phone, actually.

Anyway, as the bond herds get caught way off sides (it seems only yesterday that everyone and his uncle was bearish on bonds) and the media blare on about inverting yields curves, we realize that the macro is and has been shifting, but that one alarming day to reverse yesterday’s Polar Opposite Sentiment Swing does not a market make. I wish I were shorter, but at least I grabbed some long profits while the grabbing was good.

From this afternoon’s subscriber update using this chart.

Timing being what it is, I was away from my office when the market decided to get really hairy. The media present potentially inverting yield curves (as recession signals) and doubts about the Trump/Xi trade war agreement as the reasons. But the real reason is probably that it’s a volatile market. Duh!

And if our view is correct that volatility is a precursor to change. Ref. the weekly H&S scenario on the SPX. Recall that we are looking for it to grind up and down with an upward bias until time can build out a reasonably symmetrical right shoulder. Here’s the updated chart from NFTRH 528’s Opening Notes segment. A grind fits the build out of a right shoulder well. This was never going to be a breeze because a break above the daily ‘W’ resistance (ref. this morning’s update) would have wrecked the bearish H&S situation. It retains the potential to grind with an upward bias for a few weeks.

However, daily SPX is back below its 200 day moving average so we cannot discount that the whole mess could abort sooner. It will be very important for SPX to recover the SMA 200 (currently 2762) this week or bearish time lines could be pulled in.

I was actually concerned that they might bull this pig up above the resistance at the top of the ‘W’ pattern per this daily chart from this morning’s pre-market update. That would have compromised the “grind” aspect of Mr. Theoretical Weekly H&S up there. Now both charts present a grind and we are on track. My trading sucked, but we are on track.

I can joke about Keystone Cops and publicly announce myself as a sometimes doofus as a trader without too much pain and shame because the #1 position is and has been cash equivalents and short-term Treasury bonds paying monthly income. That has been the advice for months, actually. You have to have a special sort of constitution to successfully trade a bear market. I don’t have that. I do dream of riding SPY short to target, however. But I’d like to clear the current technical static (i.e. volatile grind phase).

Finally, a side benefit would be that if/when the stock market bear phase finally plays out, we are at the ready with the counter-cyclical gold sector. I am a lousy market bear/short, but I think I am a better gold bug… if I get the right fundamental and technical mix.

Okay, have a good night. I just wanted to get a couple things off my chest because I am disappointed in the in-week guy. He deserves to face the public music. But I am happy with the weekend writer guy. He deserves a pat on the back (IMO, of course). ;-)

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