Hello 3700. We've been hanging out in this area for about a month now it feels like. And based on what I said yesterday, looks like the market needs more time to decide which way to go. So let's think about some things. We are technically still in a bear market and this also has the feel of a bear rally. Why? The day the CPI report came out, we gapped lower and it looked like things were going to fall apart. But obviously we didn't. We got a huge bullish reversal candle. There were just no more sellers and it seemed they were all exhausted from the last few weeks of selling. So of course the buyers are gonna step in. But what happened the next day, did not convince me. The candle on the 14th was a "Dark Cloud Cover". We gapped up and had to come down to at least half way or more of the previous day candle. Which is also a signal to the down side. but we've continued higher. I've also noticed that the volume since the 13th has come down more each day. Another sign of a bear rally. 3800 is not out of the question because it can still make it's way up there and be a bear rally.
So here we are flirting with the 20 day, waiting for the signal to advance for the next move. In all honesty, I don't think the 20 day wants nothing to do with us and we head lower. Next week we should have some action in the markets from all the big tech earnings. I jumped on a couple banks earnings calls last week and many are not painting a pretty economical outlook. IF, we get some reaction from earnings next week and the VIX makes it's way to 40-50 following all the earnings, we can get to 3400, 3200 worse case 2900? I'd say somewhere around the mid term elections we will reverse and head higher. Get our Santa Clause rally in December and end somewhere around 3600 for the end of the year. And who knows, we can move higher from here. Doesn't matter. Be patient. Trade the market in front of you, risk manage and position size accordingly. Happy trading!
So here we are flirting with the 20 day, waiting for the signal to advance for the next move. In all honesty, I don't think the 20 day wants nothing to do with us and we head lower. Next week we should have some action in the markets from all the big tech earnings. I jumped on a couple banks earnings calls last week and many are not painting a pretty economical outlook. IF, we get some reaction from earnings next week and the VIX makes it's way to 40-50 following all the earnings, we can get to 3400, 3200 worse case 2900? I'd say somewhere around the mid term elections we will reverse and head higher. Get our Santa Clause rally in December and end somewhere around 3600 for the end of the year. And who knows, we can move higher from here. Doesn't matter. Be patient. Trade the market in front of you, risk manage and position size accordingly. Happy trading!