Real quick charts and comments on where we are, where we were, and where we are headed.
Just like last week, we started out with weakness. Yesterday I was expecting a repeat of last Tuesday, instead we fell off a cliff late in the session. Stocks continued to fall this morning. In the chat room I spoke on audio right near session lows about the resiliency of this market. How I would not be shocked to see the $SPY over $200 before the week ends.
Sure enough, stocks rallied and closed right near session highs. Just a lucky guess. Who would have thought that the dip would get bought. I guess you could say its been too easy, but all I see across the investment world is how stocks have topped, traders shorting and averaging up on their shorts, how higher interest rates are around the corner, how growth is slow, how no one has a job.... yet stocks sit near record levels.
My concerns short term lie with the current S&P 500 futures chart. We need to break current resistance tomorrow, or we could be looking at a test of this mornings lows in short order, and ultimately a break to lower prices. Yeah, I'm a realist. I'm not going to slam my head against a wall fighting a market, I do after all trade with real money. I can't afford to be wrong everyday.
Yet looking from a different vantage point, I see a market consolidating for a move to fresh record levels. Not many are calling for that type of move here, and that's why I think it is the more likely scenario.
In a world where central banks remain actively aiding in the inflation of asset prices, there remains no better place to be than stocks. While asset prices rise, inflation remains unusually calm. This bodes well for continued central bank support.
It might look like a top to some, and it can be tough buying stocks at record levels, but the trend still remains to the upside, and fighting it has been futile.
Let's see what tomorrow brings. Have a good night.
I will be starting the ditto trade follow account as soon as tomorrow.