I certainly believe our Economic prosperity farce will still come to roost. Last week’s light volume rally will probably be sold early in the week, but I am now medium term bullish. A move below SPY 85.5 would void my play, and I would remain sideways to down at that point.
Fortunately the snow has been keeping me cheery. My portfolio has been flat for the past month as I have been double crossing myself. Frankly it is quite annoying.
I have probably started leaning short a little too early, Thursday and Friday. But I still like the decision going into the weekend. About 170 negative deltas at this point. I have been selling my long Close-ended funds into this rally. I would be a buyer of the market around SPY 89 (50 day MA). I think we will see some type of rally into the inaguration. We have the 10 and 20 MA moving up, and coming close to crossing the 50. That could be explosively bullish. The 200 day is around the SPX 1180 and descending relatively quickly will eventually be formidable.
The last real Bear Mkt rally we had, March – June, worked on alternating weeks. A strong up week, with the following week (starting Mon afternoon, or Tuesday mid-morning) selling off. But the medium trend remained up. I think we may see something like that take place. I wouldn’t be surprised to see SPX 1000 or even SPX 1150. In the next few months. I would be surprised to see it move straight through resistance without some significant down days.
Again, I think we see some type of technical profit taking pullback to SPY 89 (confluence of 10,20,50 day MAs) But Then I am a long buyer for awhile. Probably selling some Put spreads in the indicies, and buying the Close end which have large dividends.
I dislike so much of what is happening in with our Govt and financial system, but I trade to make money, not simply being right. There are some very powerful technicals suggesting a rise. We shall see.
Here is a book I just ordered:
The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History
Trading Options at Expiration: Strategies and Models for Winning the Endgame
I dislike so much about the fundamentals of this market, but the trend is forming and it is shaping UP.