I’m amazed this week is almost over. It’s been quite an intense week, particularly psychologically, as I stood alone as the last bear in the solar system as of Tuesday, in spite of plenty of doubters and dissenters hither and thither.
Just the past couple of days have been exceptionally positive for my portfolio, but the real potential is Friday, which could be either glorious or dreadful. The magic moment happened on Wednesday, and, God willing, that will mark the end of Wave Two so we start to have some real fun.
If indeed Wave Three has already begun, Friday could be an absolute wipeout. Indeed, and let me be crystal clear on this, the top we’ve just established is the FIRST legitimate top we’ve seen in literally YEARS.
The weekly chart below shows the pissant, crappy, malformed “tops” (though not really) that have faked us out. This time, we’ve got an honest-to-God (and massive) reversal pattern, and as of this moment, the weekly bar for this week is a glorious shooting star which portends great fortune for the three or four bears that have joined me over the past forty-eight hours.
There were times early this week when I had nearly 50% cash on the sidelines, but I’ll just come right out and say it that I’m loaded to the gills. I’ve got TWENTY different bearish positions, and I have a particular emphasis on energy.
Although I haven’t touched crude oil itself in ages, I am focused in a huge way on XOP, which is partly dependent on what crude does. The /CL futures have been making teeny-weeny tops for months, and it looks like we’ve just wrapped up another one.
If so, the resistance on XOP (dashed red line) should hold.
All of which leads to the prospect of the XOP top being one of the biggest, baddest, nastiest reversals in any ETF around. I sure hope so, at least.
Out of 20 positions, 19 are profitable (the best one being MRK, up 55%) whereas the one and only loss is COP, with a devastating -5.2%. I have every confidence COP is going to become a monster winner and join its 19 brethren.
In the meantime, fingers are crossed for Friday. I’m not sure if anyone even cares about the PCE, or if market action will be driven by the occupant of the White House. My obvious hope is that, after we’ve wrung the VIX out over a ten day stretch, we can be completely done with any more counter-trend silliness.
Good night, Mason! If you somehow manage to hook up with a young porn star in fifty years, don’t be a dope and dump her! Oh, wait. Too late.
