Good afternoon my friends. The markets for US equities just closed 5 minutes ago at 4:00 Eastern time. And all indices as I expected and wrote over 700 points ago were up HUGE. IN fact it is the best back to back days in a long, long while.
Let me explain again. As the "little guy" (dumb money) is ALWAYS wrong en mass, you can see the results. In fact I posted the below chart BEFORE this week began!!
WE have called every 1000 point move regardless of direction since we began here in January. And, exactly within but a few days at most of the bottom or top. Look it up if you care to. SENTIMENT is key. And put/call ratios are the main ingredient and how to apply them to "what's happening".
I said just Saturday I expect a 6 percent rally maybe much more off the mid (or a bit lower) 24,500 level. That's the average based on the percentages of "dumb money" shorts. Isn't it just amazing...market psychology.?? IN mid September the don't worry be happy crowd was near 90 percent long! AFTER the carnage near record "shorts", they were convinced the sky is falling.
What is alarming is that they do not seem to be buying this rally. So, we have a wall of worry. WE were up to the moving average at 25,400 (approx.) that is resistance and sure enough we closed now up 241 with some selloff at the close.
I said I would have in my trading days bought that 24,500 level with tight stops. The way I traded I'd have been gone before today's close. And the readings as I just said are BULLISH. I am not in the market having sold all (not metals) in mid-September. Trouble lies ahead in 2019, I seriously believe. It will involve the enormous debt, China and Russia and gold.
Bitcoin commentary: At 6325 is there an end in sight for this "malaise"? I see none, but I can only guess with the degree of complacency and 82 percent of traders long (shockingly) it is not going to resolve in the near term to the upside. I can't see BTC going through 6700 significantly and holding such a move. If I had to guess, we go lower. It seems the attitude is "It is just a matter of time" before we see 15,000 on the way to infinity. I hope I am 100 percent incorrect.
Thank you for your support. We'll comment soon on the expected (short term) metals weakness and what to expect before the year ends.