Is the bull market dead in the water at this point? Historically, the answer is easy. No.
But it has been a painful ride:) October was grueling and November so far has not been much better.
One thing to watch for a turnaround is this graph. The bottom graph is what to watch for, the blue crossing back up over the yellow line on a weekly basis.
Graph courtesy of Quantifiable Edges
Watch for the Nas/SP relative to switch to the Nas leading. That would be a good trigger for a market turnaround. It’s not perfect, but it’s not bad.
The good news this morning is the election drama is about over, with no surprises so far.
The bad news is, the eurozone is in disarray, and the Fed had reach peak insanity mode.
Now I am not saying Alan Greenspan was correct when he opened the floodgates of liquidity for Y2K. But, what I am saying is you have to have some accountability and consistency in Fed policy.
The policy cannot dramatically change depending on what the thoughts of the head of the Fed seem to be at the time.
If people lose faith in the Fed as an institution you might as well get rid of it, as it creates more harm than good. Let the market dictate the rates. If dramatic events happen, then have a non-political department that deals with that.
But to have Powell, and his cronies on TV every other day disrupting the markets, is not healthy.
I am approaching the markets with some conservative trading, but not abandoning the idea that we are hitting the best weeks and months of the year historically.
But I was invested when the U.S. credit rating was cut during the best weeks and months of the year:) Was in Hawaii on the beach on Friday when I learned the news.
I expected the markets to off about 2,000 Monday morning. When they were only down 100 to 200 I hedged everything.
I do not think that is where we are now. It would take a trigger, and that is what to watch for.
I made a few more trades yesterday, and am slowly positioning myself for a rebound.
So, we will see:) No sure things when your gambling. And make no mistake, short-term trading is just another form of gambling.
The difference is that there are many more variables in play. Blackjack its simply the count, and how to avoid getting caught:) Dice there is no out, Poker, lot of variables, except in 10 handed Omaha 8 ring games, and sports handicapping, the easiest of the bunch, except you, have to overcome the 5% vig. That is the tough part.
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)
Good Luck Today
RickJ’s Handicapping Picks