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If you want to get a sense of how confused, volatile, and unpredictable the market is, just take one look at a daily chart of ETF symbol EDZ. We can rename this market Gap City. Incredible.
I seriously can't remember a time that a candlestick chart has looked anything like that. Bulls and bears alike are getting lurched all over the place.
The higher we climb, the more comfortable I get leaning bearish. Below I simply offer some major indexes with their "uh-oh" levels cited. By "uh-oh", I don't mean that crossing them negates the prospect of lower prices, but my expectation is that the market will stay beneath these levels until such time as we can tag that 1050 target on the S&P I've mentioned a few thousand times.
A Sloper by the avatar name of phantomcapital sent me his view of the market's future. I really, really like this analog he put together, and he kindly gave me permission to share it with all of you. It lines up nicely with my own thinking.
As we all know, it's dangerous to get married to analogs, but if you follow the mantra that "it works until it stops working", you'll be better off. Thank you, phantomcapital, for your hard work on this and allowing me to let the group see your chart.
Just a random observation here – – – the market has bounced very quickly, but there are two things in the favor of the bears: (a) a meaningful amount of overhead supply, enveloped below in green; (b) the fact that the market did violate the supporting trendline, suggesting not only weakness but a lower probability that the market will be able to attain the upper boundary of its current trading range. It's still too early to go hog-wild shorting, but a few select plays here and there make sense at these levels.