The counter-trend advance began haltingly on Sunday and Monday (at one point even going red) but once normal trading opened, it was off to the races.
I would point out, however, that this miniature rally already looks quite tired. Look how marvelously the /NQ stopped at its Fibonacci resistance level. (The rounded rectangle I’ve highlighted is the post-FOMC insanity which was swiftly squelched).
To be clear, if this is the start of a more meaningful rally, yes, there is a LOT of potential room to grow (which is why I have a freak-ton of cash just sitting around doing nothing at all right now). But I’m taking this one day at a time, and one chart at a time. This is one advantage, for me, of dealing with 88 different bearish possibilities. I can pick and choose which ones, on their own, seem ready t roll, irrespective of my guesses about the market overall.
To my way of thinking, the post child for our situation is Chipotle Mexican Grill (CMG), which I am short in my personal account. On the one hand, yes, it has lost a lot of value already (like 40%). On the other hand, it is way, way, WAYYYYYYYYYYYYY far away from its true value which, in the end, will probably be a 80%-90% wipeout. So…….my bottom line is that this bear market has many months left to it, and this whole counter-trend nonsense is just another nettlesome nuisance we’re going to have to address.
