Good morning, Slopers. We’ve made it through a lot lately, and I’ve got to say, in the 37 years I’ve been starting at charts, I cannot remember ever seeing anything weird as the new pattern – – let’s call it Powell’s Middle Finger – – that happened yesterday. I suspect bull and bear alike are approaching today with a skosh of nerves.
My view, more broadly, is that the market is in a state of metamorphosis. These transitions are excruciating, because the spoiled, molly-coddled bulls find it very hard to let go of their easy, brainless money days, whereas the bears (all two of them) are too shell-shocked, traumatized, and psychologically broken to believe that a market that goes down more than twelve seconds is even possible anymore.
In spite of that, the charts make it clear that the market has topped and has hammered out an important reversal pattern. We see it on the NASDAQ Composite…….
……the NASDAQ 100…..
……the small caps (Russell 2000)……..
……..and on the S&P 500. If we do cut through the low from last month, the next obvious target is that horizontal line, which was the prior lifetime peak of the S&P because the five month period of unchecked insanity went into action.
For myself, yesterday went from great to awful to great again. As I’m typing right now, the quotes are bright green across the board, but I remain steadfastly bearish. I’m sure you wouldn’t expect anything less from me. Here are my five positions, all bearish, and all by way of being long puts:
- DIA
- ON
- QQQ
- XHB
- XRT
