I’m going to make this post rather fast for one reason: squirrels. You see, the squirrels around town get up at a very specific time, and once they are up and about, it’s all over for me and my dog walk. You’ve never had your arms yanked off quite so swiftly as when a bunch of bushy black tails are scampering around and two very large, strong dogs are intent on pursuing them. So I need to scoot while I have a chance.
In any event, you all know my fixation on crude oil and my bearish positioning on energy stocks. In spite of yet another very green day on ES and NQ, I’m feeling pretty good about this morning, because crude continues to weaken. It seems that the OPEC meeting this month turned out to be just a fake, fabricated, anti-market contra-trend joke, and the true direction of commodities has resumed. I remain gleefully long ERY and DRIP and short a hodgepodge of energy issues, each of which I detailed last weekend.
We updated the mostly bearish view on commodities earlier in the week. This includes the current bounce, which is happening exactly as was planned ahead of time. This would be the second such bounce we’ve projected within the intermediate bear trend (sort of opposite the chart of SIMO above). Using this chart we have plotted a bounce target of 182 to 184, with a shot at the SMA 200 (currently 187).
It has now been exactly 10 months since we established 2410 as the measured objective for the S&P 500. In forming a potential double top this week at 2405.77 I’d say we are close enough to call the target in (as we did in February when the first top was made on what we called “peak Trump” day, post-congressional address).
Now, a target is not a stop sign; in this case it was a long-term objective based on a chart pattern, period. It could make me look like the genius I certainly am not, or it could just pause at the target on its way to further upside mania and a potential market blow off. Don’t let ’em baffle you with bullshit, nobody knows which of those, or whatever else may be in store. (more…)