So is whatever spooked Dennis Gartman on Friday behind us now? The dovish Fed story is getting played today. It’s the ‘beat the crap out of ‘em and then wash-rinse-repeat’market. Longs, shorts, everybody into the spin cycle. All because this market is still 100% enthralled with these clowns and that makes it difficult to manage.
SPX held support (60 min. view below), Semiconductors never lost the uptrend and now the Fed comes with some dovish love making for the market. A bounce at the least was in the bag.
But the SPX did hold at support as everyone should have noted and so people who missed the downside kick off should not have been shorting it above support. Only on a breakdown should the market be shorted; a breakdown followed by shortable bounces.
A daily view is even more concerning for the bear case. My main question was not ‘is this the start of the bear market?’ (I continue to lean toward that not being the case). My main question has been will this interim correction be a mini or a maxi?
Today wants us to believe the answer would be ‘mini’ (2 down days is hardly a correction) as with the one from early March and unlike the nice one in January. One thing the bears have going is that today was pumped by the pathetic fretting of our friendly interest rate manipulators. The market ate out of their hand today. But inflammatory news usually does not build good rallies, or going the other way with negative stuff (like oh… Ukraine), corrections.
Unlike SPX, the NDX has established upside overhead resistance, but the bounce target is higher still. As for shorting it, that would depend on what the rest of the market looks like at the time NDX reaches resistance.
Again, NFTRH’s stance is and has been that new highs are very possible, with weird bearish events like the last few days serving as bull fuel. In fact, manic new highs are very possible because that remains the most likely eventual killer of this bull; pure momentum into which the last buyer buys silver circa 2011, err the stock market.
