Well, there is one and only one trend in place – – – that is, me bellyaching about the markets and saying my post will be relatively short today.
This whole Sisyphus thing gets really old. Up, down, up, down, up, down – – all month long. You may ask: "Tim, why not take profits on days you are up?" Because the only way to make real money is to ride a trend………..at least for more than 6 hours at a time! My equity curve resembles the edge of a saw. Up, down, up, down, up, down. Insane!
The broken trendline is still intact and still has meaning. But by exceeding last Friday's highs, the market did some damage to the bears today.
It was even worse in Russell-land; the resurgence in battered financial stocks helped the IWM and $RUT quite a bit, and the series of higher lows and higher highs, shown below, is troubling. Particularly since the downturn we were starting to enjoy a couple of weeks ago was stopped cold.
I am feeling better about my bearish positions on oil and gold, however. Early this morning, oil and gold were briefly strong, but they gave up these gains and moved into the red. The horizontal line on the $XAU at 157.50 is formidable.
You should also take note of the substantial bearish engulfing pattern on the OIH……….
………and the USO………….
I was looking at the S&P 500 chart, and I found something interesting. Look at the three sharply ascending trendlines I've drawn (not the long purple ones, but the blue ones, below). It may not look like it, but all these lines are the exact same 70% angle. What I find kind of riveting about this chart is how, for the third time in a row, the market's countertrend is cleanly tracked by this line, and eventually prices fall away. Plus, with each succession, the amount of "recovery" time is getting shorter, and the amount of "climbing" time is shrinking too.
I have avoided pursuing dead cat bounces in the financials. Those that have, for the moment, have prospered. Just look at the 300% gain in MBI, for instance, over the past six weeks.
But you need to keep these things in context…………as well as the potential for a resumption of the plunge.
The biggest sign of my nausea with the market these days is my complete absence from the comments section. I usually really enjoy reading the comments, getting new ideas, and answering questions. But I am again (for the moment, at least) so put off by the market's whipsaw action that I don't even want to go there. Let's see if Friday does any better for us, or if this week is going to end on a sour note………..
