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Today’s market is in a straight to the point kind of mood, so I’ll get right to it. $XLE is currently trading at 81.24. I expect it to trade down to 57.60, the October 2021 POC, by November of this year. That would be a 29% gain if you shorted $XLE from here. Let’s take a look as to why I expect that outcome.
Well, by popular demand I feel compelled to share my thoughts on the great state of California. I must say I love the idea of Californians visiting the South, and sharing their experiences. And people from the Southeast doing vice versa. So here we go, without further ado.
I will spare you with the reasons for my visit to the Bay Area, but I did recently spend a week in our host’s beloved Bay Area. I had been to California once before when I was growing up. My family took a trip out west. We visited Los Angeles, and then drove up the coast to spend a few days in San Francisco. This was in the mid 1980’s. We loved it. I remember being on a stage recording of Star Trek at Universal Studios. My sole purpose was to be “the kid trapped and drop 1,000 gallons of water on.” Yeah, that was me. It’s a fun video to watch now. I also remember the Redwood Forest, and really liking the architecture in San Francisco. It was good trip.
(more…)Every morning before the market opens I spend about an hour looking through the charts of all the stocks and ETFs that I follow. This morning I was looking back at how some of the bounce plays I mentioned in the my “August Bounce” video. Many of the ARKK-related plays had large runs, such as AXON and ADBE. However one ETF looked slightly different to me this morning… MSOS.
This market has that kind of a feel to it right now. What kind of feel is that Rev? This kind. Something just isn’t quite right. The scene below is from a resurrected favorite of mine: Wag the Dog. It delves into the man behind the curtain that tickles our synapses that something just doesn’t add up. I feel like our market at the moment isn’t being completely forth-coming, just like Mr. DeNiro and Hoffman. With that said, the cast to this movie was amazing, and also included Anne Heche. My condolences to her family.
I have been a long time user of analogs. I like looking to history to see how it echoes back against us, again and again. I have studied the crash of 1929 and the Great Depression at length. As a result, when I see patterns in today’s market, they sometimes remind me of patterns that I have seen before in markets of the past.
I had that experience again yesterday and today with the chart below. I recognized that SPY this year has been acting a lot like INDU acted in 1929, but on a slightly different timeframe. The 1929 chart shows roughly six weeks of trading action. The SPY chart shows all of 2022 thus far. History books can tell you what happened next.
