One of the more important lessons we’ve learned from participating in markets for the last almost two decades is that the Kansas City Shuffle is very often a very reliable move. What are we talking about you ask? Well, when everyone is looking right, go left. Still, what are we talking about? In a nutshell, the market has become very bullish, despite the enormous amounts of negative economic data and overall headwinds.
Once again, we come to you with charts that are bullish in an economic landscape that is everything but. Like we’ve said many times though, our job as traders is to follow the market and take the opportunities it presents to us, not to ‘make sense of it all’. So, while we could ramble on about all the various macro headwinds like U.S. government and student debt, stressed liquidity and bank balance sheets, looming recession and so many other factors that cause worry, we will not. Instead, we will simply quote Jesse Livermore for the millionth time and say ‘a bull market climbs a wall of worry’. It’s buy time!
The American Bull stumbles blindly forward, without caution, directly into a looming credit crisis. Not perturbed by reality, the American Bull just keeps rallying without a care in the world, resolute to let the next generation pay for its foolishness. And so, headline U.S. Equities Indices, just, keep, trading, higher.
The tug of war between the bulls and bears is intense and volatility is wild. Our stance is to use any strength the might be available in the week to come as an opportunity to get out of stocks and manage our exposure. The time for nimble positioning is upon us, and we must stay flexible and willing to react to a fast changing market.
Where the picture for the bulls start to unravel a little is when you look at Oil and the VIX in particular, and also when you consider that the S&P 500 has not managed to clear resistance. Let’s look at some charts and we’ll show you what we mean.
Bulls start to unravel Read More
Another week of painfully low volume markets locally, and nothing but a slow sideways grind in the offshore world. This current environment continues to reinforce our bearish view. Markets are feeling a little like they are about to test some key support levels as the current short-term bullish trends have broken. Let’s look at some charts and get a feel for what to expect next week.
Short-term bullish trends have broken Read More
Markets started pulling back a little last week and we’re likely to see that momentum carry for a few more weeks. Next week is likely to be dominated by inflation and interest rates as focus on CPI and PPI reports could influence sentiment.
When good charts go bad Read More
Lat week did not go as expected. We’d thought that after the FOMC rate decision on Wednesday, that the market would come under some pressure. Instead, the market rallied its face off for two days and only showed some weakness on Friday. Granted, the Friday weakness has us feeling a little pessimistic going into next week, but it is tough to be a bear at the moment
It’s tough to be a bear Read More
I’ve been a little bearish of late. and well, I still am. Looking at how charts are playing out right now, it’s not looking good captain! In general though, a short update this week. The December feeling is creeping in… even though it’s a bearish one.
It’s not looking captain! Read More
Well, the end of the year approaches and markets find themselves at a rather pivotal point. The moment of truth is upon us, and we will soon learn whether or not the down trend is over, or here for another six months.
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