DJT: Batten the Hatches, Prepare to Dive
I've been watching the DJT over the last couple of weeks because it's kept a very tight price pattern and has suffered from little consolidation whipsaw. It's a good leading indicator over the SPX and DJI, and showed the current broad market reversal a week before the other two.
Friday's upward action is likely a short squeeze from the bears closing their positions before the weekend. Monday may have a minor rally, but the news headlines have sure read with a strong negative sentiment to me, and I anticipate a minefield of bull traps laying in wait for anyone sticking their neck out without a strong hypothesis on an individual security moving against the market. Gold stocks are back up, pot stocks seem to be heating up more as a possible source of alpha for risk takers, and this week is going to be light on earnings news until after mid-week, too.
I expect this current cycle to run for at least another week or three only to see some overall bullish activity again by late March or early April. If you seek out long positions in individual equities, ensure that you have a sound hypothesis for profit or else you will find yourself recklessly running right into a bull trap.
Friday's upward action is likely a short squeeze from the bears closing their positions before the weekend. Monday may have a minor rally, but the news headlines have sure read with a strong negative sentiment to me, and I anticipate a minefield of bull traps laying in wait for anyone sticking their neck out without a strong hypothesis on an individual security moving against the market. Gold stocks are back up, pot stocks seem to be heating up more as a possible source of alpha for risk takers, and this week is going to be light on earnings news until after mid-week, too.
I expect this current cycle to run for at least another week or three only to see some overall bullish activity again by late March or early April. If you seek out long positions in individual equities, ensure that you have a sound hypothesis for profit or else you will find yourself recklessly running right into a bull trap.
Comment:
Today bounced, but is it a dead cat? If this rally picks up steam tomorrow, then I'm going further long on my current profitable basket entries.
Trade closed: stop reached:
Well, it looks like the choppy open to March has given way to sunny skies again. Trade on!