I’m not saying we’re heading lower — because nothing in the data suggests that should happen. But there are a few reasons why you should lighten up here — especially after such a big run up.
We’re right now at a level where a lot of people got caught long several months back. People are likely eager to sell around these levels to count their blessings and move to cash. Also, we should expect to hear about Q2 in March, possibly Apple. We know Q1 was horrible and the market priced it in. What if Q2 isn’t good enough to justify the run up?
Trump is touting progress in his negotiations with China. But is President Xi likely to cede to his demands with the US elections less than 2 yrs away?
Lastly, QQQ is now overbought in Exodus, with flawless stats implying downside action. The last time we were overbought on the Qs, the market topped out and barreled lower, starting the late 2018 panic.
Can’t hardly go up 22% in two months without getting overbought…I think a tradeable pullback is likely. Demand for puts rising.
My average price for UVXY is about 41.50. I hope to add. “We will see”.
http://money.cnn.com/data/fear-and-greed/