NB: Near-term some sort of correction is due, index trading >2SD above 50DMA, overbought near 80; absent a Fed Hike on 28/29 Jan, expect a modest pullback.
The monster break of Feb 2018 is unlikely to repeat now without adverse Fed rate action, but ofc anything is possible in this nutty market- not for faint of heart!
In 2019 every correction started on the day of the Fed meetings, in May, July and September... IMO history likes to repeat, seems like a good bet. Could start now, from Friday's close at 3330!
The down move could be a 6-10% correction, deeper is doubtful, but possible; it's a 4th wave and these tend to be tricky trading.
Expect wild choppy swings like we saw in August- whipsawing, don't get your hands cut off! Save ur cash for Wave 5, it will be a terrific long play!
After this move completes, what comes after is anybody's guess, but this market has shown a proclivity for double tops, IMO is likely to do so again; pre-election jitters likely may start a deeper correction in Sep/Oct. We had a October in 2019; a one in 2020 is a likely consequence IMO. Beyond the election: entirely depends on the Donald pulling off re-election; as an incumbent with enormous cash to burn, his chances are better than 50-50 IMO; I expect him to win it, when he does, markets will rocket to the Moon- the 2.618 Fibo extension is certainly within grasp up around 4128!
Again, this post is pure Wild-Assed-Guessing, the tail WAGs the dog, GLTA! Be careful, be cautious, be prudent at this juncture! -DS
Near-term correction (4th wave of Second Drive) tar box: 3064 - 3112;
Intermediate-term next ATH (Third Drive) tar box: 3448 - 3587;
Deeper secondary correction tar box thereafter: 2800-2880 (From chart, 2840 +/- 40 pips; note the zone of prior resistance in 2800's from Jan 2018 becomes support for the next correction!)
Final bull wave, Fifth-in Fifth of Five explosive melt-up after re-election going into 2021 of Primary Trend Century Wave to PE 30: 3996 - 4128.
After which, as The_Unwind glumly enjoys to predict; The Great Crash of 2022!
GLTA! See you at the top (and bottom thereafter!) my friends! :-) DS
Made bank off the gap; we take what the market gives us. Some $2 contracts went for $10 and the VIX Calls jumped ferociously at the open, closed VIX positions when $18.85 first thing, you knew that wouldn't last long!
Consider buying puts on UVXY; on a bounce it fades geometrically.
look to re-open positions on a bounce. For now I wrote bull spreads on QQQ and SPY, long the March ATM contracts, short Friday 31 Jan in $3 spreads.
If it sells more I got good prices on the short legs, ~1.10 for OTM contracts that traded on Friday for $4.40, wow it sure sucks to be that guy! Brutal...
This ETF fades exponentially as time decays (credit to Hungry Hippo for this idea!); time is always on your side in this trade, should markets lift here the VIX will fade rapidly, is already more than $1 off opening highs!
Has all earmarks of a bear rally, a counter-countertrend move, likely fail after FOMC.
If exhaustion gap will close soon, but a runaway MOMO/FOMO is going IMO...?!
These crack hard... holding shorts and rolling the short legs in bear spreads for fun and profit.
Drawdown in long legs on 31 March put contracts is nominal, VIX is not crushed.
No telling how high is too high, feels like it draws closer now. Won't be long IMO.
The number of NYSE-listed stocks that have hit new 52-week lows have spiked up to 946 in morning trading Friday from 694 the previous session and 100 at the end of last week. That's the most new lows seen since Dec. 24, 2018, when the Dow Jones Industrial Average DJIA, closed at a 15-month low. The Dow dropped 963 points in morning trading toward a 14-month low. Meanwhile, stocks making new highs spiked down to 4 from 26 on Thursday and 248 last Friday. That was the lowest number of new highs since Dec. 26, 2018.
Almost all bears are becoming bulls. The bulls, and TV talking heads, are mocking the bears, "how could this market possibly drop". We are at a rate extreme, and the herd will be running for the exits soon.
Also we are in an unprecendented situation where the US economy is growing while Euro rates are negative. I also want to point out the at SPX dividend yield has gone as low as 1% and we're at 1.7%.
If you were alive in the DOt Com era, you'd know how stupid the market can get. APL is driving the market and PE ratio is still under 27, which is actually about average for a tech stock. AMZN announced record sales.
I doubt we see a major move down until we see inflation and the Feds are forced to raise rates. That's what eventually collapsed the Dot Com bubble. That won't happen until next year.
Agree. This is not a Dot Com yet. We are in melt up that is not ending any time soon. Sharp corrections happen during melt ups though. I think we are due for a sharp pull back, up to 10%, and then the market moves back up to ATH's again, within a couple months. Any sharp pull back should be a great buying opportunity.
So we get a small drop and the melt up continues until we see inflation or Bernie leads the election polls. One of those 2 events will end the rally.
Shorts are getting squeezed out of every stock, so when the drop happens, it will be big and sharp because there won't be short sellers buying.
To catch this drop you gotta be in it the day before; but we never know when that day will be; "Aye, there's the rub!"
It's not all just a short squeeze, Germans are definitely pumping futures, which is why it's melting along the upper trendline. Negative interest rates are unprecendented, especially in a growing economy.