If the market does not give us a meaningful bounce tomorrow (~+0.75%) and hold, and instead breaks lower, things could accelerate to the downside pretty quickly. The downside risk at this point is heavier than the upside potential so all I'm saying is be careful. Would not personally be buying at these levels because you may be holding the bag if this goes wrong.
Bullish count is green.
Where the last couple weeks have been a complex consolidation pattern of WXYXZ and now the markets will shrug off everything and keep going up. If this happens then we could be looking at a further euphoric meltup.
Bearish count is red.
Where the last couple weeks have been a 1-2 1-2 1-2, which.......would be bad. Like....really bad. That said, I'm sure most people here would say there's no way, but based on the candles and price action here, this is the bear case.
How could things go badly?
If Oil prices continue upward.
If bond yields continue upward.
If precious metals continue upward
These do not all have to happen at the same time, but if we see strength continue in these areas then that is bad news, especially if yields and oil trend upward still. That means inflation. IF inflation is not slayed and just slowly dying at this point, and is really a fire smoldering that is ready to start a fire again, then markets could be tipped upside down. I am holding long positions in growth stocks that I feel are very undervalued, but am also holding a large volatility position because I think the market is easily euphoric at this point and I see a lot of complacency around.
Also, you can keep an eye on EUR/USD. I have noticed that it is pretty positively correlated with the stock market with a bit of a lag, so when EUR/USD starts falling, the SPY and markets may be forming a top or going into consolidation, and alternatively when EUR/USD forms a bottom and spikes up with markets it can help give confidence that the move up is real.
Let me know what you all think.
Cheers,
Bullish count is green.
Where the last couple weeks have been a complex consolidation pattern of WXYXZ and now the markets will shrug off everything and keep going up. If this happens then we could be looking at a further euphoric meltup.
Bearish count is red.
Where the last couple weeks have been a 1-2 1-2 1-2, which.......would be bad. Like....really bad. That said, I'm sure most people here would say there's no way, but based on the candles and price action here, this is the bear case.
How could things go badly?
If Oil prices continue upward.
If bond yields continue upward.
If precious metals continue upward
These do not all have to happen at the same time, but if we see strength continue in these areas then that is bad news, especially if yields and oil trend upward still. That means inflation. IF inflation is not slayed and just slowly dying at this point, and is really a fire smoldering that is ready to start a fire again, then markets could be tipped upside down. I am holding long positions in growth stocks that I feel are very undervalued, but am also holding a large volatility position because I think the market is easily euphoric at this point and I see a lot of complacency around.
Also, you can keep an eye on EUR/USD. I have noticed that it is pretty positively correlated with the stock market with a bit of a lag, so when EUR/USD starts falling, the SPY and markets may be forming a top or going into consolidation, and alternatively when EUR/USD forms a bottom and spikes up with markets it can help give confidence that the move up is real.
Let me know what you all think.
Cheers,