Things today just didn’t make sense as some of the biggest banks in the United States that have been most beaten up mentioned that they need 10-30 billion dollars in additional capital and yet their stocks are up 10-30%. Crude oil inventory goes up but it’s not up as much as expected and crude oil is flying. Yale university professor Robert Schilling who wrote the book in 2000 “Irrational Exuberance” and predicted the market collapse, now that we’ve had the rally is suggesting people should be back in equities in an article in Bloomberg’s, go figure.
Nothing makes sense anymore.
It's all hype and fear-mongering on the way down, and hype and jubilation on the way back up. Bullcrap on every side of the story.
There is no point in trying to figure out "what to believe" anymore because it's all a load of crap... the good and the bad. The "truth" is out there somewhere amongst people few and far between to whisper in dark places to their own conscience when no one is around to hear them... or rotting away in prison cells never to be seen again...
The only thing you can do is play the technicals. As sidewinder likes to say (or something like it)-- the trend is still up, until it is not.
Higher highs today.
Hitting up against key resistance from Jan highs.
In my opinion (now), the smartest thing to do is to take any profits if you have them and wait on the sidelines to see if next resistance pushes things back down (should hit within a couple days). And then wait further to see how far down it drops (higher low or lower low), and then take a position accordingly.
Second smartest thing to do (IMHO) is to be long, with a very close stop and an eye on a reversal at this pivotal resistance area, with a modest hedge to the downside.
Least smartest thing is to keep trying to short this beast before it has turned. You know, like I've been doing for the past month. Again, as sidewinder says -- "don't try to fight city hall"
However,
every low point gets retested eventually. It may take months, but SPX 666 will come back into play at some point.
In my opinion, if this reversal was "real" and "for good"... then 666 would have been retested within days to form a more sustainable W reversal pattern.. That would have been more "natural" and "healthy". A V-reversal is not healthy, especially a V-bottom. V bottoms smack of pure manipulation. Logically there should not be enough volume to create a full V reversal at a bottom, as money is not interested in the market/security at that time (hence mass exodus sending it down in the first place). That's why the W forms - money comes back in, gets back out, slowly confidence is built back.
But for now, the exuberance train is till riding the rails of the giddy Uptrend Line, starting back from Mar 16 after the first spike was driven in (loving the railroad analogies here... my dad would be so proud
). And there's plenty of people still hopping on board once the train slows down for it's scheduled stops. And only the engineer truly knows where the end of the line is. Or rather, the train robbers holding the gun to his head...
Good luck out there. And good lord, don't take my advice...
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