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Well, the past couple of weeks all by themselves have played havoc with bulls and bears alike. Big drops and big recoveries have taken place back to back, and as I am typing this on Thursday evening, the ‘on again/off again’ Korea Peace Lovefest is back “on.” Over a span of two weeks, the market has been absolutely trapped inside a relatively tiny 35 point range.
In all this crazy madness, the bulls have never dropped the ball. Indeed, as we approach the end of the fifth month of this year, it seems quite clear the bulls remain absolutely and fully in control. Observe the Dow Composite and how the moving averages have been silky smooth without a single crossover. (more…)
For those of you that have followed me through the years, you would know that I utilize Elliott Wave analysis to track the markets I follow within the context of both their smaller and larger cycles. And, to that end, you would know that I am neither a perma-bull nor a perma-bear. Rather, I see the market as it is, and not as I believe it should be.
For example, when everyone was getting very bullish in late 2015, I warned that we were setting up for a drop from the 2100 region back down to the 1800 region. Yet, I also warned that investors should not get too bearish, since that pullback will set the market up for a multi-year rally pointing to 2600+ in the SPX.
Given the crazy moves interest rates have been making lately, I thought we’d check in on my trio of bearish positions (by way of being long January 2019 in-the-money put options). Below are all three, with an arrow marking my “uh-oh” spot when things would turn wrong. So far, they haven’t, but I’m wringing my hands a bit more than I used to. First there is the Dow 15 Utilities:
I’ve never put a penny into the world of cryptos, but I find the financial and psychological phenomena around that “industry” (ha!) to be fascinating. Since mid-December, the bloom has come off the rose, to say the least, but it hasn’t been a straight line down. Indeed, Bitcoin a few weeks ago looked like it might muster back into the quintuple-digits again (which would mean merely a 50% drop from its highs), but its hands slipped away from that rope.