There are so many crosscurrents in progress right now, it is hard to pick one. But I will try. For some time my view is SPY 165 up to 178 is our top. We are here, and the upper range is still in play. It will all come down to when the free money flow will start to decline, which will cause a sharp break, like last month, without the fool you twice stick save from the I'm just kidding Fed game we saw in July.
Personally my view is we have topped, and volatility selling into low volume is keeping the averages propped. The Fed owns too many bonds, and we are not creating enough new debt for the Fed to keep the same pace. We will now see at the beginning of each month when the POMO schedule is released, how much new market fuel the Fed intends to create. Any reduction from the expected level will be met by selling.
In the meantime metals and miners are already in motion, reversing to the mean from the QE induced selloff from November on. This is a clue for me, as that means big money is selling the indices already and closing their short positions. We are not out of the woods yet, but for those stocks in these market segments that are over the 20 and/or their 50, a buy weakness/sell strength approach will get you a strong hand to ride a true breakout.
On the energy front, it appears consolidation and short term weakness has set in. Watching USO, UNG, and OIH says short term sell, but long term buy, as of this week. I wonder what the Egyptian news will mean on Monday.
For me, I am long miners, SAND, SLW, and short with SH. I am watching energy very carefully. Any breakout will mean a pretty big move higher.
Below are some charts and commentary.
Personally my view is we have topped, and volatility selling into low volume is keeping the averages propped. The Fed owns too many bonds, and we are not creating enough new debt for the Fed to keep the same pace. We will now see at the beginning of each month when the POMO schedule is released, how much new market fuel the Fed intends to create. Any reduction from the expected level will be met by selling.
In the meantime metals and miners are already in motion, reversing to the mean from the QE induced selloff from November on. This is a clue for me, as that means big money is selling the indices already and closing their short positions. We are not out of the woods yet, but for those stocks in these market segments that are over the 20 and/or their 50, a buy weakness/sell strength approach will get you a strong hand to ride a true breakout.
On the energy front, it appears consolidation and short term weakness has set in. Watching USO, UNG, and OIH says short term sell, but long term buy, as of this week. I wonder what the Egyptian news will mean on Monday.
For me, I am long miners, SAND, SLW, and short with SH. I am watching energy very carefully. Any breakout will mean a pretty big move higher.
Below are some charts and commentary.
Personally my view is we have topped, and volatility selling into low volume is keeping the averages propped. The Fed owns too many bonds, and we are not creating enough new debt for the Fed to keep the same pace. We will now see at the beginning of each month when the POMO schedule is released, how much new market fuel the Fed intends to create. Any reduction from the expected level will be met by selling.LOL Boost
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