And Then The Flying Rats Attacked
Updated
So yesterday we closed comfortably above the Green trendline (now acting as support once again), and we're sitting just above the all time weekly closing high of 350. Well done to the bulls! Shorts now appear to be extinct on this one-way MMT highway. But, a potential double top formation on the weekly is emerging, and a move back below the Green trendline could result in a vicious sell-off with even the slightest shift in sentiment. Personally, this is the outcome I'm positioning for.
Hourly RSI hit 84+ yesterday showing extremely overbought conditions in the short term, and all of this bullish price action off the back of... nothing. Imo there's little-to-no return to the upside left in risk assets, and the risk buyers are assuming at these valuations far outweighs the reward. With earnings starting this week, the election just 3 weeks away, and stocks at all-time highs, we could be in for some fireworks this week, folks. Is this one gigantic bull trap?
Let's see what happens next. Stay tuned!
Cheers,
Michael
Hourly RSI hit 84+ yesterday showing extremely overbought conditions in the short term, and all of this bullish price action off the back of... nothing. Imo there's little-to-no return to the upside left in risk assets, and the risk buyers are assuming at these valuations far outweighs the reward. With earnings starting this week, the election just 3 weeks away, and stocks at all-time highs, we could be in for some fireworks this week, folks. Is this one gigantic bull trap?
Let's see what happens next. Stay tuned!
Cheers,
Michael
Note
Vol showing signs of life here, back above the 50 day MA. Now sitting at 26.55. The majors are all in the red now, and although tech is showing some resilience (down around half a percent), the rest of the majors are down over 1%. Should someone call the plunge protection team?Note
We just turned red on the week heading into power hour. Losses accelerating here as the rally appears to be losing steam. We've been trading in a tight downtrend all day, seemingly synthetic price action. Remember when it was stairs up, and elevator down? The elevator seems to be out of service.Note
Stocks catching a bid here, and tech now green on the day.Note
Looks like the plunge protection team got the message right around 3PM. Massive buy program here on the 5 minute, like a rocket ship. How dare the market fall 1%?Note
Okay guys, it was a pretty boring day of price action for the most part. But, importantly, the bulls were able to keep us above the Green line support, and above all major short term supports. This is going to come down to what happens on the weekly, as we're fighting to close above the all-time high on the weekly around 350. This is now the 4th day in a row closing above the Green line support, adding validity to the bullish continuation theory. But, I'm skeptical the bulls can hang on to these levels on the weekly. As earnings begin to roll in, I think we'll close the week below the Green line, and resume the downtrend we observed leading up to Sep 24th. Thanks for your time today guys, and have a great evening. Cheers, Michael.
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