So first off let me own the fact that I’d originally leaned toward a grind with an upward bias into January by this weekly chart. That upward bias would have formed the right shoulder to the theoretical Head & Shoulders top.
Well, that is one lame right shoulder that just broke down below the February lows. But the RSI divergence at the pattern’s Head was in hindsight a big tell on a coming failure of the right side. Ah, hindsight.
As long as SPX dwells below the broken support level the current target of 2100 to 2200 is loaded. Now, will they whipsaw it? Who knows? But I have nursed the upward bias and bounce views and been mostly wrong on that. The last 3 issues have included this in the Wrap Up segment…
We have also been recalling how the bull used to routinely ruin bearish analogs and quant data and so now, a new bear might well do the same with the Santa seasonal. Sentiment is crazy bullish, contrarian-wise. But some of the best crashes have come from already extreme sentiment.
How to handle it? As already noted, I am not good at shorting the market and remaining resolute. I am good at having cash and balance and managing risk. Per today’s Trade Log I increased shorts on this morning’s pre-Fed bounce and felt uneasy doing it. I also took some profits and losses to raise cash from high to very high levels.
I already know that target or no target I am not going to get rich shorting the market. I don’t have the stomach for that. The precious metals are looking out to Q1, so gold bugs are not going to get instantly rich either.
But things are in motion to favored plans all around and as a writer that is fantastic for me (I mean, writing about an up trending robo-market week after week pretty much sucks).
Moving on, let’s never mind the stock market and gold for a minute. Just look at the herds pile driving into Treasury bonds as the Fed QTs and raises the Funds rate once again. Seems like only weeks ago everyone was screaming BOND BEAR! Oh wait, it was. Seriously, that was just a month ago.
So much to post about and so much to manage in NFTRH. Overall, I am pretty pleased.
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