Well, if there were any equity bears left on the planet at all this morning, they are surely deceased by now. At long last, the Fed announced tapering, and – – perversely, considering how bond purchases are 100% responsible for every tick the market moves – – the market exploded to lifetime highs across the board.
Not that there are any bears left who need to grasp a reed of hope, but I present to you the fact that the “push to the broken wedge analog” is still intact. Of course, it can remain intact in perpetuity while the market makes new lifetime highs every day. That’s the nature of ascending trendlines.
My bearishness on energy managed to survive the day. As you can see in this commodities fund, we are channel-bound and starting to dive.
In turn, this is helping my big XLE put position. My target on this is to fill that price gap 51.16:
Yesterday, I speculated that bonds would fall simply because Gartman was bullish. Well, that simple-minded analysis seems to have worked out. This is a big bearish engulfing pattern on the candlestick.
With rates on the rise, I believe real estate is going to get choked off. Thus, I am long December puts on IYR, which also has the advantage of an analog.
I would also point out that, looking at the %R indicator, the pattern right now is remarkably similar to the portion of time just before the Covid plunge.
There’s no doubt that equities continue to rage higher, irrespective of any news or threat. As I am typing these words, the futures market just re-opened on Wednesday evening, and it’s green across the board again. The Industrials, via symbol DIA, are doing the same thing that the SPY has been doing – – clinging to the underside of the broken trendline, day after day, making consistent new highs.
Lastly, the real bear-slayer has been small caps, which had been range-bound for the entirety of 2021 but it now absolutely on fire.
Let’s just say I’m at least glad to be long so much crypto. Taste the rainbow!