The_Unwind

Market Pushing The Bears To Capitulate

SP:SPX   S&P 500 Index
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S+P 500 continues it's first full week of 2019 strong advance
a move that started in the last week of Dec 2018,

This weeks rally has carried price much further than expected,
and there-in lies the crux.

Bears are now trapped, a point I made previously, as price continues to go against them,
creating a new market character of shorts now needing to liquidate/capitulate.

By simply rising day after day, with no end in sight,
this is the kind of rally that can ultimately bankrupt a leveraged short,
so even strong handed bears on the market are now concerned.

Bearish sentiment and volatility had reached extreme levels in late 2018
creating enough fear in the market to create a meaningful bottom,
that now appears may hold for some time.

Technical analysis requires a trader to follow the trend,
or suffer the consequences.
Bearish bets on the market are counter trend right now,
and that continues to pressure the shorts as the S+P is reaching 2600 Resistance.

This week's rally is being confirmed by money flow ,
as the accompanying chart of the Chaikin Money Flow CMF shows.

The market is the great equalizer.

First it was the bulls, that were tested, some beyond their ability to withstand,
and now it is the bears turn to get the same treatment in return.

Until the market senses that the bears have fully capitulated,
the market will continue to rise.

And at this point,... no one knows where, or when ... this rally will end.


SPX 2596.64

THE_UNWIND
1/11/19
NEW YORK


Let's clarify two items: 1. Mr powell is out of options - whatever he does he will break the market (inflation is already here + economic downturn). Masking employment data in lack of industrial data... well... this like pulling white rabbits. 2. At this price level the market is actually negotiating something much more ominous: the breaking of 2368. Once we go that way Mr powell... is powerless... and together with him... ahem... all of us.
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Funnily enough, my three times long in gold has stood firm for six months now. Slowly slowly it gets higher, no major losses or gains, just a little more each week. Over six months it’s gone up just under a fifth in value.

Trading on common sense rather than greed is the way to go. The common sense is that slowly, over time the equities market is now manufactured and manipulated to support itself with endless quantitative easing... for now the market has won and like spoiled children getting more of what they want... but quietly behind the scenes the market sort of knows that and will ultimately reward the patient.

And when the world finds out real money can’t simply be made by pressing buttons I might get a little more than my current return- which at least for now has been a little more than break even!
+1 Reply
This is hot air. This is where bears should come in... mr Powell is the only factor which blows up the market...
+2 Reply
It seems slow trading the first hour of today and I guess that many people might be waiting to see what would happen next since the market is at key resistance levels currently. 50, 50 chance for both bulls and bears right now.
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dragonus dragonus
@dragonus, Could we see fire afternoon? This is Friday and options closing day.
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I am a recently retired individual who has been a part-time trader. While working I had little time to hone my own trading skills. Consequently, I relied heavily on the comments and directions of experienced traders and market makers who at many times would degrade their efficacy by stubbornly pushing their theses. It’s refreshing to follow someone who spurns confirmation bias and let’s the evidence lead them. Keep it up Unwind.

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It seems the market has returned to its previous mode of relentless grinding up. No bad economic news impacts it. It only reacts to speeches...the bulls momentum is dying though and the price has no choice but move lower soon to pickup new bulls.
+1 Reply
This could be a very strong 4th wave taking form of a DZZ.
If 2603 is exceeded this would be incorrect and some other pattern would be in play.
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