I just happened to see this post from over a year ago, which describes an interesting measurement of how risk-averse the market is. I'd say this is yet another item suggesting a bounce makes lots of sense here. Take a look at the latest chart:
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
A thoughtful Sloper wrote me this morning, pointing out that if you draw fan lines from the peak on 5/2 to the low on 8/9, they provide a very clean target for the "plan (b)" I mentioned in yesterday morning's post.
Now, I am offering this chart two and a half hours before the Euro and ES markets even open, so I'm putting this out there without the hugely important "tell" from those markets. But, again, God hates a coward, so I'm putting a stake in the ground just to be extra-ballsy. Here it is:
If indeed we do get a push higher, my strategy is simplicity itself:
(a) keep the stops on my shorts wide;
(b) ride the longs higher and dump them once I think we've pooped out on the lift (~1170);
(c) short the living hell out of everything unfortunate enough to have a ticker symbol and be shorter than I've been in ages, covering them in October after the market drops 10%.