Agile But Fragile

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It’s no surprise that the market has absolutely no idea what to do with itself. Just look at the action from Sunday’s open to now.


I would characterize the tinted zones as these phases:

  • Yellow: instant collapse based on mountain of bad news over the weekend, but a hearty recovery;
  • Cyan: doubt begins to set in, and the ES keeps fading lower then fighting back, little by little, trying to hold its gains;
  • Green: it gets new strength and, important, busts above Friday’s end-of-day rally, increasing the confidence that a meaningful recovery is at hand;
  • Grey: it crumbles to pieces. As I’m typing this, the ES and NQ just went negative.

For myself, I entered Bear-Land again early today, but in a very small way. I am short 12 positions and merely 35% committed (Gold and Diamond users can, of course, see what I’m in by way of the TK Short watch list available via the Publish/Subscribe function in SlopeCharts). The vast majority of stocks are still oversold, but the sprinkling of items I went ahead and re-shorted seemed to have a decent risk/reward ratio, even after last week’s multi-thousand point crash.

Nope. No shorts. That was a brief mistake.