Here is the market that I have traded well and prognosticated terribly, GOLD. We are at an inflection point here in that the momentum appears to be turning back up, yet we have also outraced price in momentum by quite a bit. This basically leaves a market that can be traded in either direction. Certainly if you want to go long, Copper is by far the strongest metal, with Silver coming in second, and Gold lagging the bunch. As a result, if you are bearish on metals this is the one to sell and if you are bullish Copper or Silver are the ones to buy.
I am not sure on this one right here so I will not be placing any trades tomorrow here. I could argue equally in either direction here, but I also do not like the bar pattern that much. It does appear to be more of a continuation pattern for further upside if I had to guess, but it is not a high probability one. Commercials have been buying this market during this decline, so that should be bullish.
You can see the red lining climbing during this recent pullback. This is an ideal situation as far as COT stuff goes. They are buying on a retracement in a big uptrend, a textbook buy setup. This makes me again want to lean to the long side. Silver and Copper already took off upward Monday, so this laggard has some catching up to do.
Stocks.... Ho Hum etc.. another day another up close, 53 of the last 84 days have been up closes in the SP 500, a 62% clip, and 13 of the last 17, so obviously we are extended. Of course we can get more extended just as easily as we can retrace, and we know with a wink what the Wizard of Oz wants here, soooooo. It is certainly time to look for shorts, but I see almost no patterns in any of the things I watch that tell me to short this pig here, so I won't. If we have a big break day and I miss it so be it. You can get your back broken shorting markets like this. One of the best timing setups for markets like this is the Tom Demark Sequential, and that signaled a sell quite a bit ago that was wrong. We are left with air to stop this, so the best strategy if you are looking to the short side, is to wait for some type of break and a retest. We had that not too long ago, but the test just blew back through the highs again giving no entry.
This is what bull markets do. I would not get tied up in that jargon of secular bear market, etc.., this is a bull market period. All that other crap is just cocktail party fodder by people who don't trade. All you have to do is start pulling up individual stock charts and see many of them look like pork bellies, that does worry me, but they are far from sell signals except for the very brave.