An Unusually High Number Of Cross-Currents This Week For The Markets To Absorb

Welcome back everyone!  We have a lot of cross-currents this week.  We had the election last night.  We also had FOMC today, ECB tomorrow morning, quadruple witching, bitcoin futures kicking in, and a lot of other things to make this world go around.

Watch out in the days to come for wild swing market moves.  You have the election situation, which is bad for the republican agenda.  If they try to shove tax reform through beforehand, they could still get the tax reform done.  There are also the ECB rate announcements.  Quadruple witching always puts a wild card factor in the market.  Ultimately rising rates and cooling off the economy does stall things out.  We are still making a negative divergences on some of these instruments.  We are making higher highs on price and lower highs on some of those underlying market energy.

Right now there is a sense of euphoria that the tax reform might get done.  If that fizzles, and reality sets in about interest rates starting to raise, that could dramatically cause pull backs.  You can see now that when the market starts to jam its way one direction it really starts rocketing fast.  That is why we are using some of my more advanced institutional indicators right now.

My thought is that take more of a market neutral stance here versus a directional bias.  We are rising and above the speed lines on most of these instruments.  If we open up and gap up above these levels, I will not be very appreciative of that.  I really want to see us work through these levels.  Any sizing that I do will be around half size or less given the cross-currents we are seeing.  That is to the long side.  To the short side I am actually willing to take full size positions.  I am watching for that gotcha closely now.  The tape with the DOW was painted very well to the upside.  People were making comments on that today.  I was watching the NASDAQ and S&P pulling back.  People are making all their judgments on the DOW.

I am going to very quick to short to the downside if we see that coming in.  It will be important to see what happens with the balance of power situation.  We are going to check in more about that in the upcoming videos.  Take care everyone!

Leave a comment!
Read previous post:
Outstanding Opportunities As Key Levels Are Breaking

Welcome back! This will be a quick update video. Some of the key levels I mentioned today started firing off...

Close