Well…I want to first say that my sell signal on the markets has since been reversed with Monday’s rally and I’m patiently waiting the real signal. However, everyday the markets rally, fall, reverse, etc, rinse, repeat…. the markets continue to paint a bullish picture. I’m not bullish, but given that the market doesn’t want to retrace any of this rally, common sense would tell you that the markets are displaying bullish behaviour. We’re sort of locked in a trading range for the last 3 weeks that I fully expect to be resolved very shortly to the downside.
I tend to think that anybody getting sucked into getting long right now is going to regret it very soon. Daytrading is the best course of action in my opinion at this time and trading gold stocks as they are very bullish. Not only are they moving higher, but it makes sense that they would be moving higher with the Fed’s approach to this whole crises. The action of the U.S. Dollar is very telling.
When and if we move lower I expect it’s going to take the form of a huge one day drop (300+) on the Dow and people will find it hard to get short after that. Then the markets will continue to drop and before you know it we’re back down near the lows. That’s how the market tricks people. Notice the lack of people willing to short the markets these days. Before everybody was shorting the markets and now there’s barely anybody on twitter or the blogosphere that want to trade the darkside. I’ve said before that when one trade starts to get crowded…watch out.
NYMO close to moving back in the negative.
Who would have thought the Vix under 30?
If this rally is going to continue, we really have to see this indicator move into positive territory. Flat-lining just isn’t going to cut it and you can see that in the spinning of the wheels in the markets.