NEAR TERM: There is great trading volatility. Indeed, as noted “Now there is also a profile for some strength right into year end. So, keep your shorts on a short leash.” Indeed, stocks got strange quick. It still doesn’t seem wise to ‘Chase’ here. Still there was a profile, “for next week to look positive.” Here we are.
INTERIM TERM: Interim corrective activity is still quite possible over the new several weeks. It is not clear what recent strength means? Maybe Stocks have decided to embrace Inflation by just, Inflating. This is a very strange market.
DORSEY MARKET SENTIMENT: Bullish Sentiment has been overly optimistic for some time and it seems to be sticking to that story? But don’t get carried away by any bullish looks. It may turn into a sideways parade.
MARKET SUMMARY: Equity deterioration has been due into early this year but that is clearly not what is happening. But Inflation may be providing more of a two-way market than one would expect. Hyperinflation will be very bullish for some assets.
Trading Instrument (Gary Uses) My Trading Instruments are all based off of SPX numbers, but for long side trades I use (SSO) the 2x leveraged etf that follows the S&P 500 and when expecting the market to move lower, I use (SDS) the 2x leveraged etf that follows the S&P 500, it moves higher when spx moves lower.
TECHNICAL VIEW by Gary Dean: The bulls continue their march higher, but we now have warning signs on all charts as well as the internals. It would make perfect sense to see this market reverse anywhere up here, but we may still try for 4830/4840 before we head lower. Now it not the time to be complacent on the long side. I am shorting strength with small sizes and will continue this game plan. Gravity and time are on the side of the bears.
The daily chart shows a defined uptrend resistance line that has caused a pull back each time it was reached. We are close with sell signals on all charts. My downside targets once we do make the top-4666 and then 4400.
There sell signals remain in place on the 60 minute chart and a turn anywhere up here would make sense. But until the bears get the spx below the 4756, the bulls will continue to try and press the tape higher. The bull/bear line down is at 4718.
NO Changes!! There is a large bear flag channel in place, with a 34830-ish upside resistance line. The bear minimum for this pattern on the downside is 4660 and if it breaks below, then all out panic may hit quickly.
Summary: The bulls have started 2022 the same way they pressed the tape higher for the past 12 years–Gap Higher Opens! There are warning signs everywhere and using strength to layer in small size short trades is still my preferred set up. But until the bears get price below the 4718, the bulls will continue to try and press higher. G
Information is for paid subscribers & may not be copied or distributed. © Copyright 2022. The information contained herein was provided by FinancialInk and/or its publishers does not make any representation or warrant with regard hereto, including but not limited to those of accuracy, completeness, reliability, timeliness and/or infringement on the rights of third parties. This Publication expresses a view on the markets but is not intended to provide any specific recommendation to buy or sell any security. Investing is Uncertain and always carries Risk. Of Losses. Subscribers should always assess Market Risk parameters with their broker or financial adviser.
Information is for paid customers and may not be copied or distributed Copyright 2022