What began as late day selling, afternoon swoons, as I like to call them, has morphed into something more. Buy the dip is now sell the rip, invariably the question gets asked.... has the market topped? Is that it? Is that long awaited market crash coming?
What do I think? It's what I've thought for many years now, many of which I have shared when the market was in a tailspin. When the crash callers were out reinforcing their bearish views of the market.
No! The top is not in. I do not think the market has topped. I think the market will be higher at the end of the year than it is now.
Calling for a top in this market gets you a bevy of followers on twitter. Akin to slowing down to look for a car wreck on the other side of the highway, top callers and uber bears, despite being terribly wrong for 10 years straight, get the press, the media, and the likes on twitter. Everyone just has to look.
With this most recent pull back, the top callers remain. And yet the trend also remains. A trend that has been relentless. Why fight it?
This most recent pull back will reverse, just as all the other ones have. The trend still remains up. Higher. The real question is when will this market resume its move higher? We are close. Yesterdays action looked poised to break the recent move lower. And yet the afternoon sellers returned. However support held, and small caps remained above the prior days lows.
I thought the Russell 2000 low on Monday was a fitting low, filled with 6's, the market likes those 666 lows. 1616.66..........
Also $SPY held the key 50DMA and trendline support:
I think the move higher will resemble the move from the middle of the summer, resulting in another new all time record high.
Starting out small, the title of this post, implies that the recovery will start with the small caps. This recent pull back began with small cap weakness, and it will end with small cap strength.
and last but not least the VIX. These VIX spikes, much like my early season excitement about the NY Gaints, don't last very long.
The VIX may have already topped out. Yes I am calling a top for the VIX. Calling a top for the VIX has worked. Calling a top for the market.... not so much.