The FOMC fake-out on September 23rd seems to have changed everything. On that day, the market went from one that was completely confounding to me to one which I feel like old friends with again. It has been a redemptive experience.
What would make sense at this point would be to get another lift this week – one last gasp, if you will. Whether it crosses into a new yearly high or not almost doesn't matter, although it would make it extra delicious if it did push to a nominal new high, ideally above 10,000 on the Dow. Revenge is a dish best served cold.
At the moment, most major indexes perfectly touched their trendlines at Friday's lows.
Although over in NASDAQ-land, the indexes have breached their trendlines and – – if things pan out as I hope – – will wriggle their way up to the undersides of those former support lines.
The other interesting thing is how the VIX exploded from nearly 20 to nearly 30 over just eight days. An easing off this rapid advance also lines up with the notion of a general rise in the week ahead.
As I've mentioned recently, I've held on to all my short positions with the exception of the large day-trading-ish ones, because in spite of the fact I think I'll lose some ground if the market pushes higher…….
- It is too risky and time-consuming to leap in and out of a bunch of small positions;
- I think the prospect of them moving much lower in the weeks and months ahead makes it worthwhile to let them sit basically forever, adjusting stops along the way
This is, by the way, how I prefer to trade. I don't get my jollies out of day trading. I'd much, much, much rather have a huge portfolio of instruments that slowly break down over time. It's a heck of a lot less work.
I would add in closing that gannsecret's mention of October 9th as "the top" didn't go past me (in spite of the fact that I have missed, without exaggeration, the most recent 8,000 comments or so). I'm keeping that in the back of my mind, since some other charts agree with that zone. I eagerly anticipate the week ahead. As usual, it's time for me to do a lot of reading. Have a good Saturday, my friends!