We awake to a red morning, in which the (relatively minor) unemployment report that came out is souring the mood. Of course, the big Kahuna report is tomorrow, but in a market this dynamic, we must take things one session at a time.
What’s really cool is the fractal nature of the /ES right now, which I believe Xerxes pointed out. Check out the past week of the /ES futures and note the exceptionally well-formed continuation pattern I have highlighted.
Now zoom way, way back so instead of looking at a few days, you are looking at the whole of 2023, and you can a vastly larger pattern almost identical in form. I have drawn a rounded rectangle around the “pattern within a pattern” to make it easier to see.
The NASDAQ is in the same boat, with a well-formed pattern that is just itching for a hard fall.
As a recap, here’s where my own portfolio stands:
- 15.2% cash
- Two large bullish positions as a hedge (XLU and LQD)
- 1 large ETF short as an anchor position (SMH)
- 9 equity shorts expiring in various points next year
- 1 “mad money” SPY put that expires Friday of modest size
