Good morning, everyone. Well after the disappointment on Monday (plunging Sunday futures followed by explosive green streak), on Tuesday (higher all day long), and Wednesday (plunging markets earlier, then an hour after the open, massive bull move higher), I am utterly skeptical of anything I see in front of me. As I type this, nearly two full hours before the opening bell, the entire screen is red, and it doesn’t mean a damned thing. I will only note that, in recent days, the 3802 level on the /ES remains sorta-kinda decent resistance.
I would also note that, as a dedicated energy bear, it’s nice to see crude oil starting to gasp and wheeze a bit, after the extreme OPEC manipulation. Of course, the very idea of a cartel is to “manipulate” in the first place – – none of us can pretend oil is anything resembling an organic market – – but my view is that the dying world economy is going to catch up with the murderous and leering MBS soon enough.
The two looming events on the horizon are, tomorrow, the jobs report and, next Thursday, the CPI (for some queer reason they seem to have flipped the CPI and PPI release dates). Looking at the NASDAQ Composite, I can still see the risk of this rally continuing until a meaningful resistance point.
The best hope, as I alluded to earlier, is that Fibonacci retracement. In fact, there are two retracement levels that just so happen to be close to one another. They are both anchored to the lifetime high from the start of this year, but as for their start points, one is anchored to the March 2009 bottom while the other is anchored to the April 2020 bottom. Somewhat magically, each of them share a retracement level just above 3800 on the /ES.
As for myself:
- Yesterday morning, I came in with a ridiculous amount of cash (35%);
- As the market started to fall to pieces, I scrambled to deploy most of that into new positions;
- Only to see them immediately get ground up into hamburger;
- I partially retreated and, as I approach today, have 12.5% cash and 30 positions.
I just can’t seem to get any traction this year. My P&L looks like a sinewave, and it’s really quite annoying. I will say that the “forced distribution” of profits that I’ve started a month ago has definitely helped, both psychologically and financially, but, God damn it, I want an unrelenting, merciless plunge. C’mon, 2022!
