The Charts Just Don’t Support the SM Bear Case – – – Yet
It seems the herd is itching to nail the SM exact top and many big name investors have been shorting the S&P for weeks and months. I trade what’s right in front of me and I cant find the bear case in the chart structure at current levels. From a market psychology standpoint, if the SM moves up to all time highs from here before finding a major inflection point, that will likely make the most number of losers out of market participants. With that said, if prices do move up to make marginally higher highs, perhaps around 11,500 on my $NYA chart, that would open the door for a bearish shark pattern to come into play for those familiar with harmonic patterns (i.e Gartleys). For now, at least from my perspective, it appears the bears are absolutely guessing that we are at market top because I cannot find a shred of chart evidence to support it….while I see a lot of chart structures supporting higher prices from here. I hear most of you guys citing fundamental evidence that prices should fall from here….horrible economic growth/earnings, historical statistics, etc…..but we are chartists here and could care less about what is “supposed” to happen from here. That’s all just biased talk to me. Just watch how quickly you will blow up your account trying to trade overblown P/Es, record put/call ratios, extreme sentiment indicators, etc….sorry guys, that’s just how I see it…which doesn’t mean squat I know but it’s a perspective.
Mark, You are correct that this does look bullish. Call me stubborn but look at the NYA or DOW for the period from 2000-01 and I see the same trend line breaks as we see today in many indicies. FWIW, this is the fractal I am tracking to on many levels from a price and time perspective. The SPX is very close to making a higher IC High compared to November 2015 (the last IC High). If it does that soon and we make a higher IC low this summer vs Jan/Feb the I will turn more bullish.
The sector I am playing here is the confirmed Bull in PMs. My stock market Puts are very very small and I will just let them expire if I have to but I also see them as low risk and high reward should we get another waterfall decline this summer (which is what happens in Bear markets as you know).
Based on some EW analysts if SPX makes new high above 2134. It is a bull case for SM and target may be 2500 to 2800.
Great charts. Thanks Mark.
Hi Mark, I owe you an apology for flipping out a few days ago about something you said about Armstrong….not sure why I had taken on the job of defending him but I quit this week-end…I really do appreciate all that you contribute in helping me see what is right in front of me right NOW….Cheers, Caroline
No apology needed Caroline…no offense taken and I appreciate anyone’s view with a thoughtful take. If we ever are all in 100% agreement, I’m immediately going to 100% cash….hehe
all in 100% agreement you’re going to 100% cash….hehehe that is SO RIGHT!