Just A Quick Note
It’s been a couple of weeks since my last WSW update, and one is due tomorrow, but things are moving today… So here is a ‘sneak peak’ at what will be presented in detail somewhat later.
No charts or graphs, just my take on things:
I think this is a ‘tradable rally’ off the simple moving average lines, and a “buy if touched” order ought to have ‘bought you in’ to desired positions, but
I don’t like it. There’s something making me feel “off” about it. I need to run all the numbers and charts, but here’s what has me “sitting it out” with about 1/2 my cash right now.
1) Traders I respect (Gartman and some others) are “short this market” and while the news flow had them saying “when the market moves against you, you have to cover your position.” they clearly still have bearish sentiment. Given any weakness, they will be back to short again. And they did not say they were abandoning their shorts, just going to ease back a little for a little while.
2) The volume is light. We’re not getting a lot of conviction. It tastes more like a ‘battleground’ top than a ‘new rally with conviction’.
3) The 10 year weekly chart looks like it is saying “time to trade out”. This often happens just before a major “correction” or just before a new bull market (which I think we are in) turns sideways and waffles for a year or so to “digest” the rapid run up out of the crash bottom.
4) What I’m seeing in the action looks more like “short covering” than “new money”. A short cover rally often fades in day 3 or 4. That would be Friday or Monday. If this IS a valid rally ‘with legs’ there ought to be a nice ‘reentry’ opportunity then. If it is a ‘head fake’ and the 10 year weekly trend moves to ‘be out’, well, we avoided the whipsaw at the top.
So I’m not going to hop on this rally in any big way. I’m holding my dividend payers and my long term positions, but my trade money is going to sit it out until I’ve done the whole analysis. I may miss one cycle of the run up, but I was out at the top of the last one, so I see no reason to put those banked winnings back on the table right now. “Early out, late in is good. -emsmith”. Yeah, some fast money could be make as a day trade, but I’m doing enough other things right now I can’t watch this market minute by minute…
“Manage the risk and the reward will take care of itself. -emsmith”
Right now, the risk is higher than I like and the reward is lower. I’m managing for the risk and letting some potential short term trades slide on by…