This post is not to be confused with analysis of any serious kind. It is opinion-based, and as I watch the market systematically puke its way southward I cannot help getting more (and patiently) bullish the lower it goes (I have four current and tentatively held short positions after covering my largest position, which was against SPY).
I am sorry, but the bear just seems too mechanical, as if it has been programmed to do a job, which it is carrying out with great precision. We will soon see whether the bear can register our downside targets with that same precision. But it is what comes next that will tell the story.
While we’ve had a downside target for SPX that I thought would get hit sometime out in Q1 or even H1 2019 (allowing up to 6 months of grinding lower) this thing is going there in hyper time, as if it’s got a job to complete with great efficiency. Could we get an epic drop to target in 2018? During this little under the radar trading week? Anything is possible, but it’s highly unlikely.
But what about January? What to do when the market hits downside targets and all the formerly resolute and comfortable bulls have been cleaned out? What about when the short-term bullish precious metals come to near-term upside targets, AKA resistance? We gold bugs should not get complacent because the machines may well not be programmed to optimal long-term outcomes. January, folks.
There are going to be decisions that need to be made in January and they may be somewhat surprising to majorities of people. The machines are coded and loaded. It will be our job to crack the code and be prepared.
I am getting so excited I have got to relax and imagine that the process is being guided without emotion even as the herds get so emotional they may actually thunder right over that cliff over there. Stock markets are above important support levels and can crash all the way to those support levels. But taken in the context of a bigger picture, many markets are bullish and it seems like the machines are simply carrying out a task.