Being a bear has been awful these last few months. The top on April 20 saw a meager 3.8% sell off and was actually a buying opportunity for many sectors. I have not been very active in the market except for some individual stock shorts. I have a large slug of cash and I am waiting. If we get a sustained breakout over the May 2015 high I will reassess my bearish ways.
Fundamentally things continue to look bad but technically we don’t have credit or the VIX on the bear’s side. We do have the possibility of a failed trading cycle here if we were to roll and take out the May 19th low. There is a potentially very subtle short set up here but I am not playing it until some key levels are taken out and the Vix wakes up. I got a call from a friend that is convinced that we are about to make a big turn here and begin to crash according to his very under followed methods. I want to believe him but I will err on the side of caution here.
I know I have not been posting much but on the bearish front there has not been much to post lately and I don’t want people hurting themselves trying to short a market that won’t go down. In addition to the short set up there is a long set up as well for a breakout. This inflection point is way harder than last year was because everyone was looking up and were not worried about downside. The investment community is now aware of what I saw last year and now its about herd positioning. The monthly bollinger band width is at an extreme low and we will be getting a very big move soon. I would like to tell you it is down and that this is the mother of all head fakes but I can’t honestly say that I know for sure. Watch credit, the VIX and key support resistance levels for clues. It is apparent to me that TPTB will not let this market implode before the Fall. The question we all have is can they hold it up much longer?
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Funny how time works. We gather information about our current circumstances and plot it against past historical equivalents to give us an indication on how the human race invests capital. There are all kinds of vehicles to do so – this variety gives the brain little time for being sucked into one particular emotional area, leaving traders a different world to inhabit – giving a wide overview. Even with this edge, there is little room to anticipate the possibility for the crowd to move in synchronicity in one particular emotional area. The madness of the crowd. This leaves the possibility of a complete bearish/bullish outcome.
I think your post here is wise. There is a certain higher-than-normal percentage chance of an outwardly bullish/bearish move with killer contrasting rallies before and after to crucify just about anyone, following the historical central bank intervention and interest rate environment at present. Politically, things are even more noteworthy.
Personally, I’m being more patient than I’d like to be. This is testing me beyond what feels to be my own lifespan. Observing the whole system tested to its limit is tiring work. Still, it will likely be exhilarating seeing it conclude, and just maybe some of us can make some money out of it. Salut!
rick rule
http://sprottglobal.com/thoughts/articles/rick-rule-interview-series-part-v-the-difference-between-being-wrong-and-being-early/
marin katusa
https://www.youtube.com/watch?v=wYbqX1atHzw
http://kingworldnews.com/michael-belkin-6-8-16/
It won’t matter until it matters
http://www.tfmetalsreport.com/podcast/7667/a2a-grant-williams
Blue,
What’s up with the Vix???
Up 23%?