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Look, we are all wrong sometimes. That is because the markets are this way one day, that way the next and then something else the day after that. That is why we need bigger picture plans.
I for instance, have been guarded on the gold sector and technically at least, still need to see some upside parameters taken out. But today’s market information brings a potential fundamental underpinning as the stock market flirts with some important parameters of its own.
My long-held goal of vaulting back up to the VIX trendline is slowly materializing. I’m baffled that the market is so strong with this going on, but it is what it is.
Having said that, I can’t help but express disappointment that, yet again, a sell-off was quickly squelched. It would be nice if it actually stuck one of these days.
Hey, look, I’m as pissed as anyone that the sell-off has been smothered in its crib (thanks, Gartman!) but I want to offer you this silver lining:
Those of you trading based on the Tim Depression Algorithm (TDA, even though it’s wholly unaffiliated with Ameritrade) were, of course, greeted with red numbers on your quote screens this morning. In fact, at the moment I was glancing at USD/JPY on my iPad, the dollar rocketed higher……
Before I get into the Trade Idea, I’m going to review the context of the S&P500 from a structural standpoint and a typical deviation standpoint. First of all, structurally, the Weekly and Daily charts show higher highs and higher lows, the very definition of an uptrend. In November of 2016, the SPY completed a $20 wide trading channel of which currently price is a stone’s throw from its high resistance. The channel would suggest that buying potential is limited.
Now, anyone who hangs around the comments has seen that I use 5% simple moving average envelopes around a 100MA as a measure of movement potential (oversold, neutral, overbought). Where are we now? Yep, hit it on Friday. Again. (Click on any chart to see a larger version).
