Just one look at the daily chart of SPX tells us - in hindsight - that this may have all been about gap acquisition. I was completely right and righteous to be bullish on the Christmas Eve massacre low, right on up to the 50-day moving average, which was the original target.
After that, I was compelled by the market’s technicals to be bullish for a drive to the SMA 200, and then 2815 resistance, and then… a top-test. I not only felt not righteous with these compulsions, I felt a little soiled. Hey, it’s just a human (as opposed to a newsletter writer/market commentator) talking about human feelings.
There is a difference between being contrary and willingly bullish and being compelled to be bullish. I don’t like the feeling of that second thing very much. Anyway, there is a gap and do you know what? Last summer’s rally filled a similar gap (not shown here) from late January 2018, proceeded upward into a nice bull trap, and then October happened. FYI. The bears were disoriented and thus pissed all last summer. But any self-respecting bull trap would by definition piss the bears off because it’s the same psychology that traps the bulls, only in reverse.
So SPX is finally at its top-test limit, with its leadership chain (SOX>NDX>SPX) still strong as NDX is at new highs and SOX is well into new highs. We also have the scenario of SPX to 3000 (+/-) open if it is to hit point 5 on a potential Megaphone. Continue reading "Goldilocks Now, But She'll Be Vanquished"