Technicians as a group are one of the most "panicky & short sighted"......
We had a quad witching, rebalancing, too may fed officials on "yak mode"..plus we had a great run on Wednesday when we had a "breakout" to new all time highs......
BUT...technicians are ignoring any "bullish technicals" & are hitting "panic button"
They are all afraid of Monday as the third day of selling.......
Technicians are citing that bulls are @ 42.3% & bears are @ 21.61% as a reason for pullback......
They are also fixated on our national pastime of US government shutdown for the 17th time.....that comes in 6 trading days....
SO..we got a "cocktail Mix" of daily Fed yak, Politicians yak......which is going to kill this "bull market" for now ?
Bull market is impacted by "surprise"...NOT by routine & predictable behavior.....
Fed officials "love to CONTRADICT" Ben Bernanke & create their own Fed policy......that is how they get "routine TV coverage"
US politicians are "paid to shut down US government"...not to keep it going in any direction.....
BUT...there is hope for "contrarians".....
-There is an ongoing strong bull market which defies all negative predictions...
-There is "month end buying @ hand"
-Angela Merkel wins German election....
Pullbacks are healthy, it sets up nicely for another strong run.......
SO...sit back & relax.....this strong bull market is far from over...it may go down in history as the "biggest sustained bull market for decade"
Based on my read...we are only half way in this amazing run.........Five more years to go !!!!!
BLOG does NOT give buy or sell.
Saleem
3 comments:
Hey Saleem,
In reading the first half of your blog I thought we were going to be in different places, but as I finished, I think we are fairly close together: a pullback may be upon us but it again becomes a buying opportunity? I think that's how I read your blog...and if so, I'm right there with that sentiment.
I think a Monday pop from German elections could fade in the US as uncertainty increases here, but I am ready to pounce as the debt rhetoric peaks later this week or next. There are so many great companies and stocks ready to lead the next many years of gains.
Stocktrader
Hi Stocktrader,
I do not believe that TAPE is ready for a pullback beyond what has happened already.......1.1% is all what bears can get for now.....
Whenever a sharp pullback like Friday happens...we normally rally right back to new highs....that is my thesis for now......
Angela Merkel majority is only a minor factor......bull not running out of steam is a major one.....plus everyone is bearish or expects a pullback now IS my biggest contrary indicator......
Saleem
Hey Saleem,
Ah, thanks for the clarification.
There are certainly many reasons why Friday's pullback might be it. It's why I kept many of my key stocks despite raising some cash late last week.
Good luck to all of us as the quarter winds down! :)
Stocktrader
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