Today is a great example on the dangers of going Bull when in Bear territory. You can make money upward, but if you get caught, bear moves are somewhat unpredictable and violent. By the time you know what is going on, you are not sure if you should ride it out or bail. Again, I have been in my most conservative allocations for my 401 and will remain there, although for now I favor a bump up before the down. 

Here is where it gets sticky. BE CAUTIOUS. When you are in bear country, moves up are also violent and sometimes unpredictable. They usually not as powerful as the downs, but have been on occasion. I will do some TA later on today, but we hit 139 and pulled back not breaking the 4 year rising wedge channel yet, and VIX did not pierce it's 1 year descending wedge channel yet. I suspect, FOR NOW (subject to change), we hang around this level through end of week. If you scroll down, we were expecting a big fat red candlestick for this week. We have it, but it's not end of week. STO still has further to drop on weekly, although daily is coiling nicely for an up movement. MACD is a few days or a week away from bottoming out on it's channel (unless it wants to break it, which for now seems less likely).

I suspect we will shoot upwards soon. Whether you want to play the Bull bounce or not is your call. It will not be long lived maybe 3-4 weeks or so, although in magnitude it might be significant. After that, I expect a stronger down, but I also suspect everyone will call me nuts for saying so when the market could be appearing to rage. 4-6 weeks from now seems to be a treacherous time period. 

Hey, I don't get them all right, you never know, but lately my calls have been pretty darn close. Exact timing is always hard, but if you can pick the trend, you really should make your own individual calls on timing. That is a very personal thing. Overall trends are what I focus on explaining here, but getting in and out should be done by you.

Chart 1 - VIX Weekly - Within trendlines

Chart 2 - SPY with MACD - history repeats




Leave a Reply.