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Like most non-insane people, there are some things I like about myself and some things I don’t. Over the nearly ten years I’ve been writing this blog, I have tried to be candid (within reason) about my shortcomings and personal frustrations, but there’s one thing in particular which I don’t like that has been very much on my mind: my aversion to learning new things.
A love of learning is a crucial part of growth. It’s not like I enjoy ignorance – far from it – I immerse myself in news and information 365 days a year, and I consider myself deep into the 99th percentile in terms of being informed. This is different from learning something new, however. By the latter I mean such an undertaking as learning a new language, acquiring a new skill or, most relevant here, learning a new approach to trading.
Just a little earlier today, Nigeria floated a story about some kind of emergency OPEC meeting, and this rumor sent crude oil (which had been very weak earlier) soaring. I think this rumor has about as much credence as any other Nigerian prince story you’ll get in your inbox, and you should pay it as much respect. I remain blissfully short energy shorts up, down, and sideways. I think the entire oil sector is in horrific trouble, and these kind of manufactured, pathetic rumors will pop up as we continue to crumble downward in the months ahead. Bite me, Nigeria. Crude’s trendline break trumps your little rumors.
SPX didn’t make it to my minimum retracement target at 2080 as it made a perfect touch of the 50 hour MA and reversed hard there. That does tend to be solid support in uptrends until they are into the topping process and, as I was saying on Friday morning, this uptrend doesn’t look finished yet.
I am considering the possibility that a rising wedge from the October low is still forming and have drawn in that possible rising wedge support trendline in blue dotted line on the chart below. If that is the case then there is a very obvious target in the 2120-5 area at the intersection of the original wedge support trendline and the wedge resistance trendline. That is the first area of resistance that I am watching. SPX 60min chart:
Last week we highlighted the fact that the market is reaching VERY OVERBOUGHT levels on DAILY and WEEKLY time periods (not yet MONTHLY though, which means higher prices are possible after the upcoming DAILY+WEEKLY pullback).
Last week had a strong positive Close, but nothing happened from the point of view of our suggested SHORT trade, it’s still there, as you can see from this chart below, the market is really OVERBOUGHT at these levels:
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