- setup is biased, but the bear market is not yet confirmed. Why? Because we still did not have a lower low! Last week Bears could not push it below August low, thus market got left with a massive positive divergence in smoothed haDelta!
- For sure we'll see more this week too, but even if we'll have some dip later, so current weekly candle still can have a lower wick, I am more confident now, that by the end of week the candle can be green. I believe is based on haDelta/SMA3.
- Weekly equilibrium level is now at 1980+
- In case all above comes true, then we will a W-shaped vendetta recovery (let's call it simply "W"endetta), caused by both Bulls (unwinf hedges, increase weight again) and Bears (stops). Possible target is 2020-2070.
Market's sentiment has become too pessimistic recently. Even if we are at the beginning of a bear market, price can not drop further in this pace if there are so many views and if investors are so much underweght stocks. We need to have a rally, a "W"endetta from the market, in which move it puneshes both late bears and perma bulls for their foolishness.... then we'll see what happens next. Maybe market will punish everbody again. For now just let's see if we get up to 2020-2070 again.
- setup is turning to neutral in a high market.
- Possible with a highr low, which may develope to "W" recovery in case Price breaks above 1985. Please note this level is very important as we have Weekly equilibrium there too!
- Should a break above Kumo happen, Price can target 2040-2070 area. I think there it would exhaust, but it's too early to predict anything like that.
If you follow me on Twitter, there you have seen I wrote about a possibility of a global risk-on, lasting for a few weeks from now.
However October FOMC meeting will be a difficult one again. FED has cornered itself, no good decision. They should have hiked base rate already, and maybe they will try to do it just to restore credibility. However as you see, market sentiment is turning again towards a correlation of "WEAK USD = STOCKS and Higher Global Risk Appetite". You can already see it from news headlines, which always try to explain why mkts rise or drop, but you can also see it from the carts.
So in case this attitude will increase in investors mind, then for the FED it will be impossible to hike...which in reflexive thinking will blow the risk bubble further; or they can hike, but that will exactly cause the next round of selloff.
Basically it is too late for the FED!
So for next few weeks I try to:
- hold and stay long some equities (I accumulated last week, almost got stopped, but it survived the )
- should hold long bonds too, but there I don't have any position.
- increase short USD against everything. Prefer to have a mixture of short DXY , long AUDUSD and long GBPUSD
- Still hold some Gold longs left
- hold WTI long
- hold the beaten ccy longs of NOK , CAD, some TRY and HUF