11:05am
Good morning. As I’m writing this, we are slightly up on the day but I’m not buying any rally talk just yet. If you look at the chart of the S&P 500, we have overhead resistance around 1100 since we went bearish last month. Until we break past that 1100 with some momentum, I am not buying any rally just yet. Can we break past it? I sure hope so. My overall strategy tends to focus on the trends. What that means is I tend not to predict Nostradamus type trend breakers and major market reversals like this bear market turning into a bull market…though I can see why it would be fun to do. While this bear market will surely turn into a bull market, I won’t make a timing call on when that will happen. That is how you lose significant capital. Therefore, I am usually slower to jumping into the bull market however I feel this is better suited for me as I don’t put myself in a position to make false predictions that make put me overly invested as a long in a bear market. CNBC always has someone telling you it’s a great time to buy when the market is bearish, very rarely is the timing correct and I try not to be one of those who thinks I can time it correctly. As an individual investor, that strategy suits me well by protecting my capital so I don’t have to recover significant losses when the bull market takes hold again.
Today has some confusing action though as the dollar is much stronger today but Gold, Oil and such are not being pressured like they typically would be. I don’t know how to interpret that accurately just yet however it could mean that commodities have just not priced in the negative yet and may break down in the near future.
I’m watching some of my favorite analysts accumulate more short positions that started yesterday so today is a make or break if this rally will really take hold. I’m going to watch the S&P 500 to see if we can break past 1100 with momentum but until we do, I fear this rally will lose its gains shortly. Good luck out there.
Mike
No positions mentioned
