Today the market rallied over nothing. Hence the title. The Fed, as by now you all know, kept interest rates exactly where they were before. The Dow rocked well over 300 points higher, and equities across the board zoomed upward while gold got pummeled again.
Prior to the opening, I had an interesting experience. One of the readers here – – I won't name him, but he's a good guy, and I respect him – – mentioned I was sounding "arrogant". Now my first reaction was to dismiss him as simply wrong, but I quickly told myself – – that's what an arrogant person would do! So I took my emotional temperature and told myself to listen to what he was saying. If a thoughtful, regular reader jabs me like that, I probably need to take stock of where my head is at and make some adjustments.
Now I'm not talking about adjusting my writing. In all honesty, it's not like I was being a blowhard. But there was enough "attitude" that he made a remark, and I decided that was a good signal – – much better than any technical indicator! – – that I'd better embrace humility, take a lot of positions off the table, and center myself. So that's what I did.
It may seem bizarre to have one word from one man (whom I've never even met) compel me to close out six figures worth of positions, but one of the cool things about doing this blog is that it gives me a mirror. And when that mirror starts to look ugly, I know that I need to adjust things. (Conversely, when I'm losing money, and I'm beating myself up, the pats on the back and "things will be ok!" reach a fevered pitch just before things turn around for the better).
Not to say that I didn't lose money today. I gave back a portion of yesterday's terrific 15% rise. But I definitely preserved a lot of profits that would have otherwise been lost.
With the big push higher in equities, we must ask ourselves again if we're going to march all the way up to 1320 on the S&P. But keep in mind it would only take one more day like today to get us all the way there! It's only 2.7% higher from here.
The Dow's next reasonable resistance is at 11,700. If it breaks that, I'd say it's heading to just below 12,000.
I have some Russell puts, and they're down about 20%. I'm on the fence whether I'll hold on tight or just dump 'em and wait for a better buying spot.
The resistance for S&P is as plain as day. Stop #1 is about 1292. Stop #2 is 1320. Simple as that.
The chart of crude oil below looks pretty bearish, but you'll be surprised to hear how bullish I am on energy in a minute. As I've been saying, though, crude could head toward $110 or so before turning higher.
$UTIL, you old beauty! Even though it went up today, this is a great pattern. As with ICE, I've drawn two necklines, since I'm not sure which is the real one. It's busted them both, however.
Now, on to energy. I've made a lot of cash being an energy bear. I think I'm changing costumes tonight. Off comes the furry head, and on comes the one with horns on top. I think there are a lot of exciting technical opportunities on the bullish side of energy and commodities. Just look at XEC. That horizontal line is pretty exciting looking, if it holds. (Yes, I just described a horizontal line as exciting; pity me).
The energy plays fall into two camps. One is the [exciting] horizontal lines. The other is retracement to major trendlines. DO is an example of the latter.
GDP has an XEC-style situation.
One thing that I think will help push energy higher is that I think gold is due for a bounce. Poor old gold! This thing has gotten just creamed!
Excitement is ubiquitous.
POT got smoked, and put holders prospered. Now I think we could be in for a 20-30 point bounce higher. Long-term, I think this is going to be a bear's delight, but why not play it both ways?
I also tripped across this little beauty today, and I bought some.
Setting aside my bullishness on energy for a moment, CEG is a pretty interesting looking toppy pattern.
And I think I'll sell my puts on MOS first thing in the morning. We've touched the retracement, and I'd like to re-enter if the price gets back to the next Fib up, which is at about $126.
I bought more PCLN puts today, and I'm glad I did. This thing is down $17 after hours tonight!
Ah, and good old BAC. This is what we technicians call the Farting Around Pattern. What on earth is this thing doing? When it breaks, it's going to break big (either up or down).
I am so behind on my emails, I really need to attack those. Thanks again for visiting Slope of Hope, and be sure to come back tomorrow! XOXOXOXO.
