Came back from my favorite place Thursday night , still on the jet lag ( I go there when I need easy money – guess what country it is? Below is a hint)
Anyhow - Revenons à nos moutons.
First thing first – as you know I am 100% net short (except for long crude oil) and color and % of that short position starting to make me VERY uncomfortable and depending on Monday’s / Tuesday’s close I might either CLOSE SHORT INDEX/ULTRA ETFs POSIIONS and take losses equal to about 7% on the trade (before adding in gains from (UCO) long position I “luckily” entered right at the bottom which puts me well in the green, but it is no excuse for a bad trading on SPX and I traded horribly last 10 days – I traded what I wanted to see not what I SAW – it happens to me once in while – I cross the line between trader and gambler … ouch! ). What I did wrong was entering big short position on July 8th WHILE TDSetup Sell was STILL in progress. (around 1640sh SPX). Then I pressed with /ES short around 1568 … All while talking about similarities with March-May topping patter for wave 5 back in 2011!
The rest .. is still not history.
Enough self analyzing …
I am going to sum the content of this post up in one phrase (for people suffering from ADHD like yours truly):
ON THE LONG TIMEFRAME (YEARS) WE ARE VERY CLOSE IF NOT ALREADY AT THE BEGINNING OF THE MULTY YEAR SECULAR BULL MARKET
Stop shouting – there is nothing I did not say before, please look at the page “Big Picture” ( menu at the top of the site) – for directionally challenged – here is the LINK
And for lazy ones who hate to follow links – below is the chart from that page.
As you can see – there are two alternate scenarios. Both include correction before move higher … and since market is best in tricking everyone – we sure might presume there is going to be no correction. I just reminded myself joke about one handed economists.
Oh well – black is white, white is black … time for me to learn from the best to be as vague as possible
Why I am sure that it is NOT a
rinse and repeat of 2000 or 2007?
Because as oppose to those tops TD Risk Level on monthly charts is being penetrated on the very next month TD Setup Sell was completed.
Bubbles across all assets classes were LEVERAGE BUBBLES.
The ONLY thing I was (and STILL ) not sure is IF market will produce any meaningful correction BEFORE skyrocketing (remember – long term bottoms put in place when EVRYTHING IS WORST THAN EVER …. like now ) – I still, based on TAs believe – it WILL have corrective A-B-C DWave down that will take DOW to at least around 1400.
In order for NEXT LEG OF BULL MARKET to surge up – weak hands MUST BE SHAKEN OFF.
That being said (WHY I needed to make this point? Because there are a lot of “actions junkies” who try to catch any inconsistencies in my views and timeframes they use are truly idiotic … like “10 days ago you said market is going down”)
To make a VALID argument once has to be
1. Use proper time frame such as “long”, “medium”,”short” terms
2. Understand “What is the magnitude of move expected”
3. Not to take statements out of content
Embrace yourselves – there will be quite a few charts. All of them monthly, except for the very last one.
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The first ( as “The Worst” ) is (XLF)
With all the money for nothing and out of jail tickets for free none can put that Humphrey Dumphrey together … not yet at least. Though it is trying it is trying.
Next one is Copper Futures (/HG) – it looks like it is about to collapse and that confirms the dismay of homebuilders stocks ( ad those are not done going down )
What you will see in the next charts you would think contradicts to /HG chart (IF it will go down ) and you will ask: “Copper collapse precluded market collapse in 2007 – would not the same happen again?”
I believe the answer would be “no” – history does not repeat – housing is inflated by easy money, but it is not qualified as “bubble” now IMHO.
Again – the next on the order of sickness – Dow Industrial Avg.
It is hitting long term trendline and in need of letting the steam out.
S&P100 already broke out, but again – slight correction is much needed.
Russell 2000 already broke out from a very bullish long term pattern
S&P500 – broke out - check
Nasdaq Composite – another fallen out of grace – but in context of the “recent market” – broke out.
Lot of traders talk about VIX in low teens – means squawk really on a long enough timeframe – all it is – people are contempt with what is going on – and people can be wrong for a VERY VERY VERY long time. And Americans can be contempt forever – while talking about things they don’t like and doing nothing about it.
Now – for the VERY SHORT TERM – I think VIX is about to spike again – perfect place – right off TDST line – then again – if not – I am out of short based on the next 2 days’ action.
ANd SPX is in my target yellow area (would not it be smart of me just WAIT for it to get there without actually BEEN SHORT already?!
Stay tuned…
And keep in mind – market is breaking into no man's land – trading will become much more difficult.
