🀨 When in Doubt...17th November 2022

πŸ–Ό Daily Technical Picture πŸ“ˆ

➀ ...sit out. In my humble opinion, the current short-term price action in equities are highly ambiguous. This often happens at key inflexion points when prices temporarily move sideways. Sometimes this is the market digesting recent moves e.g. the upward surge or the market is in search of direction awaiting some news or catalyst.

➀ With ambiguity comes the danger of forcing a trade or reading too much into a particular price action. For example, the Russell 2000 small cap stocks performed terribly today, breaking below support. Technically, I could make a case for shorting the Russell yet if I look at other equity indices, they ended above or very near support levels on this bearish day. The VIX (fear index) actually contracted showing lack of bearishness. Based on my experience, it is much better to wait another day for things to develop than eagerly risk capital in search of gains.

➀ I currently have zero exposure in the market. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.

➀ Conclusion: Thursday is Action Day?

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