Mexico City Nights
Greetings from Mexico City, I’ve learned a bit more about myself these last couple of weeks - namely… the Scottish skin, despite how much i’d like a nice deep tan, really doesn’t fare too well in 90F heat, and the net result for this pale Scotsman, is what appears to be 3rd degree burns across my back, with a nice deep red lobster color to my face - it’s a great look… honest!
Anyway, i know most of you follow me closely on Social Media, and most of you like my Monthly Promos giving my views of the market, but it’s been a while since I given a deep overall Market Analysis via my blog - so here goes.
You may have picked up from the March Promo that I’m a bit of a cautious bull at the moment, and with good reason.
There are a couple of charts that are giving me a bit of a headache, and whilst the market has quite frankly been on steroids for the last 2 months, and flexing it’s Arnie sized biceps at everyone (which has been nice) - it’s now approaching key levels that we need to be mindful of.
Exhibit A - S&P 500
We know the market has been going up, but I think most of us know the market will run out of steam eventually, and we do appear to be stalling (at least momentarily at key levels in the S&P 500) - and the message of the day would be… lets see what happens here, don’t get too crazy, and don’t go adding too many new positions until these levels are cleared.
September - December is still very fresh in everyone’s memory, and I know there are many of you out there still reeling, and unable to pull the trigger… so if you’re tempted to go jumping in - It would make sense to me that you keep tight control over your positions and manage closely.
Exhibit B - The Dow
Again, the message is simple - we have the 2 most important charts on the planet stalling at key levels in the market throughout a huge sideways range, so if the market does decline from here - it would make sense that it happens here at these levels.
Of course, if price blasts through, and takes another leg up…. I think we can continue to be aggressively long.
Exhibit C - Tech
The case for Tech at the moment is a strong 1, with what appears to be good upside potential provided it can take the next leg up along with the overall market. There is no doubt that the market needs Tech to move forward, and if we see continued positive news re: China Trade deal - then we can look to go aggressively long in Tech, and also look to identify the strength within.
Note of Caution
Most of you know me well enough by now, and most of you appreciate my no nonsense straight forward view of the market (although I understand some of you like to disagree with me from time to time) - I can’t emphasize enough just how important it is to let price dictate your next moves, and to react to what price is telling you.
In my opinion, there is absolutely zero point in shorting the market at these levels… it simply requires tight management of existing positions and to be cautious with any new positions you may wish to take in the coming days - this is just my 2 cents.. do what you wish with it.
Shorting the market would only be appropriate upon clear market direction… right now the direction is up… I don’t like to bet against price… so I won’t be shorting anything.
As always… please do your own assessment.
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