Patience
Updated
The macro uptrend we've established since 2008 is still in tact. However, according to the Sherwood Retail Sentiment indicator, retail trader sentiment is forming bearish divergence as SPX rises.
Furthermore, the monthly chart shows a hanging man candle as March comes to a close. Given that we're close to the all time highs, it's prudent to just sit out the last 4% and wait for SPX to prove to us that it's still in a bullish uptrend. Here are the 3 scenarios in order of highest -> lowest probability IMO:
1. 50% pull back, successful retest of December lows, continue the macro up trend
2. Test December lows and fail, ushering in a new bear market
3. Continue unabated to ATHs
Good luck everyone!
Furthermore, the monthly chart shows a hanging man candle as March comes to a close. Given that we're close to the all time highs, it's prudent to just sit out the last 4% and wait for SPX to prove to us that it's still in a bullish uptrend. Here are the 3 scenarios in order of highest -> lowest probability IMO:
1. 50% pull back, successful retest of December lows, continue the macro up trend
2. Test December lows and fail, ushering in a new bear market
3. Continue unabated to ATHs
Good luck everyone!
Note
[img]i.imgur.com/SHklcxO.png[/img]i.imgur.com/SHklcxO.png
Note
I've posted a link to the sherwood sentiment indicator above since their web page didn't embed correctly.Note
looks like the pullback mentioned in scenario #1 has started. Looking to start nibbling with a small position at the 50 SMA. Then, will wait for some kind of reversal pattern or candlestick at the .786 retracement, where I will deploy more cash with a stop loss.
Trade closed: target reached
Looks like the S&P has completed its pullback and has reached all new highs. I'm caught under invested with 50% of my normal position because the correction didn't go very deep, and bounced back extremely quickly. Nonetheless, was able to sit out the volatility in May and buy back in with average price of 283. I made one final purchase early this year when the daily closed at an all time high. That will be my last purchase for a while I suspect. I don't plan on buying more until one of the following happens:
1. S&P breaks out with convincing volume, AND THEN PULLS BACK AND MAKES A HIGHER LOW
2. We get a further retrace down to the 270 I originally expected when I started this post.
At this point, it feels too obvious that something could go wrong, with the market at such frothy levels. China could renege, the fed could not cut, or we could start a war with Iran. Those uncertainties and fears are precisely why you should be heavily invested in US stocks.
Note
early this week*
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