Before we get serious, let us laugh out loud seeing the sheer stupidity all around and how the market is moving like drunken sailor with a bottle in hand. My apologies to the drunk sailor for inappropriate comparison.
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Given the action in the last hour of today's trading, the notion of going completely flat ahead of the almost assured 72 hours of complete insanity that will encompass next Monday, Tuesday, and Wednesday is looking increasingly alluring.
The tension in the market is almost palpable. Each side is trying to wrest control from the other. An hour before the close, the bears were getting the upper paw. The latest bailout rumor, however, snatched control away from the bears and put it back into the hands of the bulls.
So, since Sunday, the market has been UP (Sunday), DOWN (Monday), UP (Tuesday), DOWN (Wednesday), UP (Thursday). Anyone want to guess about tomorrow's direction?
In any event, I am 40% in cash, and my positions are split about 20% bull (all energy-related) and 80% bear (all tiny individual equities).
I think I'm going to work on a new SocialTrade video this afternoon, because I want to bring the introductory video up-to-date with all the new features. I think this will be my last market-related post of the day.
Tonight I am going to go out on a limb and say that I think we will see at least the 1280’s and potentially lower by tomorrow morning. In fact, I would not be surprised to even see the 1230-1245 region by the 19th of the month.
Based upon our current chart, while it is still "possible" that we have bottomed in a green wave ii – which, if you noticed, I took off the chart this evening — I think that it is a much lower probability than as of this afternoon. Rather, if a wave 2 is going to bottom, it would be at a much lower level. Of course, if the market is over the 1321 level by tomorrow, it clearly tells us that we are heading up to 1352, but I don’t think that is the most likely scenario into tomorrow. But, this is the overnight risk I mentioned earlier, and is why I suggested to be hedged tonight if you remained short overnight.