From the chart below you can see my current market hypothesis based on the S&P500. I think we see a pullback and retest of the 200 day moving average… I do agree we continue to be in a bull market and that we will only continue to charge higher (given the political environment does not change, which is anyone’s guess). However, on three separate occasions the S&P500 has retested the 200 day moving average after surging higher, and essentially ignored the 50 day moving average. Today’s doji candlestick leaves the future up in the air, especially after the recent sideways movement of the market. I also do not see any big names pushing the market higher, the small caps have been strong, but look at overall market cap of small cap compared to large cap…small cap follows large cap not the other way around. Retailers have recently pushed higher and seem to be a strong sector for further consideration. I personally have acquired stock in several big names that I believe I obtained for a discount in oversold patterns, but these are long term investments….short term (1-2 weeks) I am all in on TVIX with a definitive stop set.
The future is anyone’s guess. Set your stops. Protect your profits. Trade your plan.