The new year has certainly been an unusual one for me thus far, since the two days we’ve had of 2014 both put me at a great distance from the action. Typically I am surrounded by eight monitors and have my pulse on everything. For January 2 and 3, however, I was down to two little laptops and spent the vast majority of my time completely away from them (which can cause a bit of anxiety, but it’s not too bad as long as my stops are in place).
Friday in particular was interesting, because the market was trying to recover from its brutal multi-hour bear market (those poor, coddled bulls!). We all know that the market isn’t permitted to drop more than a tiny skosh before someone rides to the rescue, and January 3’s role was to do just that. Apparently some words from a Fed member took the air out of the tires, though, and the ES and NQ both wound up back in the red by day’s end. (Apparently the horrifying words were along the lines that the Fed is going to have some “challenges” unwinding its multi-trillion dollar purchase of its government’s own securities, to which I say: no shit, Sherlock).
Anyway, the Russell tried to hold its recovery rally together on the 3rd, but in my short-term opinion, next week’s action is already determined: we’re going to fall by about 2.5% within the confines of the coming five days.
I would further state the the wedge is still going to be our best friend in the weeks and months ahead. The blue line will be defended mightily. Its break is quite probable, however, and that opens up a much, much larger playing field beneath.
I’m looking forward to getting back to my multi-monitors and high speed network. After a brutal five years, and a particularly horrendous 2013, the bears, I think, are finally going to get some payback.
