Sometimes I fail to look at charts through the “big” lens but when you do you see we are trading in an expanding megaphone that should take us to the 2100 area if not higher. I do not believe in the durability of this market but we have to deal with the facts that we have, not those we might want.
I fully expect to see 2100 which is a product of simple Fib extension (138%) of a price envelop beginning at 2033 and concluding at 2078. Based upon the disappointing news out of Doha, the markets retraced 38% of the price band setting up a nice long to 2092 plus a few bonus points.
There strong cases for yet even higher prices (2148 and 2200) but we’ll defer discussion of those until a later date. Additionally, the last and final descending line of resistance drawn in black may be an obstacle and contain further advances.
For those of us who enjoying shorting, which I do, there will be ample opportunities to feast upon market failure in the coming weeks. and margins are contracting and there are growing worries about the economy with industrial production declining, capacity utilization falling, manufacturing contracting, real retail sales weakening and small business lending frozen.
I hate to see guys and families with 401k’s take a beating, but a perfect storm of extreme valuations and serious economic weakness is on the horizon and there’s nothing left in Janet’s purse to save the market. And should we see a recession, you can bank on a 20% or more drop with some believing once it starts it may continue through 2020.
Thanks for reading, be patient and always trade what the market tells you, not what you think.