Whipsaws. Everywhere.
Annoying stuff but I think the bear case may be failing.
Currently fluctuating between different levels of confusion. Short term patterns really caught me out this morning. At this point I think that’s either a low or the market has seriously punked me on both ends and I’ll sit out and wait a while. Will go a longer form update on the bull case. This is a brief summary.
See for context: Signals of bear trend failure over all indices. (substack.com)
Over and over again as we were rallying over 4500 and into 4600 we said it was highly likely the 76 would retest and the 76 could be the low. If it breaks, the 61 usually hits. We’ve recently bet on the break and run to the 61 but local charts suggest this may be a false breakout of the 76.
If we’re in a 86 - 76 retracement hold - disgustingly bad time to be a bear. Really ugly things happen to bears in the next swing. It’s quick and brutal to a new high a lot of the time.
If we’re carving out a low here today, we’re quite likely to enter into a period of overperformance in the trend as it pushes to new highs.
Keeping in mind if the lows break everything is liable to get rugged - this is a good spot to go long for a run to the new high with tight stops under the current daily chart lows (Or even tighter at 4483 for aggressive stops).
We’ll do a deeper look at this now but important updates:
Shorts all closed. Parabolic move risk too high.
Long positions good now but stops under structure lows are essential.
If we rally, this is not a good time to fade strength.
Speculative OTM calls have a fair shout now.
Continued range or a break lower and I’m flat everything pending review.
My theory is when the whipsaw end it will be really easy to make money. Betting at this point they are ending and a bull break comes but if this does not materialise I’m just going to be patient and wait for something big to happen to make things more obvious.
As things stand, I feel I may have been trading small chart patterns against a big chart one - and been caught out. Would need serious bull momentum to confirm this.