In the depths of the selloff last week, I decided the counter-trend bounce would get to around 2740 on the ES and “the low 25000s” on the Dow. Well, both of those have been achieved. In spite of the counter-trend rally matching my targets, it still makes me very uneasy. It seemed that earlier today (Thursday), the selloff was resuming, but that weakness vanished, and we are at a place now where, frankly, one more strong day would cause some real harm to my confidence.
There isn’t any big news coming out on Friday, but with five solid days of powerful upthrust, the momentum is definitely on the side of the bulls. If it keeps up, I’ll just dial back on the shorts. I hope not, though; I’ve got plenty of great setups I’d love to put into motion.
The market has gone up every single day starting last Friday, which, in a twisted way, is just what I was hoping (of course, the second part of that “hope” is that it STOPS!) What is clear to me, however, is that charts like we’re seeing constitute a powerful retracement, NOT a new base upon which a new bull run is based.
A couple of announcements today. Firstly tonight’s webinar at theartofchart.net has been delayed a week due to an unavoidable conflict, and will now be held on the same night as our Big Five & Sectors webinar on Thursday next week. You can register for either or both on our February Free Webinars page.
The second announcement is that Stan and I are finally starting serious work on writing a book on TA and trading futures. We have an outline and a publisher and will be trying to finish that this year, so watch this space
The hourly RSI 14 buy signals on NDX and RUT have reached target, and the SPX signal has reached the possible near miss target. There is hourly negative divergence here, and all three indices are in the ideal rally high zone, we are expecting a rally high high soon and tomorrow is a possible cycle trend day on which we could see a significant decline. Discussed in detail on my intraday video below.
This is the whole intraday video covering nineteen futures and forex charts, as I haven’t posted one of these in a couple of weeks, and if you are just interested in the equity indices they are at the start and there is also a possible very speculative equities decline scenario that I look at in the bonds/ZB section starting in the ninth minute. Intraday Video from theartofchart.net – Update on ES, NQ and TF: (more…)
I just shorted a bunch of FXE with a stop at 120.66:
I’m starting to think it’s safe to go in the water again. I had said a number of times on tastytrade that I would be interested in shorting again if the Dow got to “the low 25000s”. It got up to about 25,200 this morning, so I started shorting again, rather aggressively, including buying IWM puts. As for one specific idea, here’s chemical maker FMC Corporation:
Another government bailout ($3.7 Billion) is need to keep Fannie Mae’s net worth from entering negative territory after reporting a 4Q net loss of $6.5 Billion, as described in this Bloomberg article.