Re: MrJohnRoss' Account Talk
Originally Posted by
JamesE
Thank you for the thoughts John. Hey, is that huge rounded top you posted awhile back still in play?
Also, a lot of folks thinking a little bit of a rally here. I tend to agree because I just don't think the market makers are going to let this thing fall ahead of elections.
If we happen to get a decent bump this week, I'm looking for the door...
Thanks for the reminder James. Here's a chart of the rounded top that I posted about a month ago...
spx.png
Of course, please don't take the blue arrows literally, they're just an approximation of what I thought might likely happen a month ago. (Possibly a return lower to the rounded top pattern, followed by a relief rally before the big fall happens later this year or early next year).
It could still play out in that approximate scenario. I think you're correct in assuming things should go smoothly until after the election, but afterwards, when the Fed will be forced to raise interest rates in December, things could start to get a bit dicey.
Today seemed like just a minor bounce off of the lower BB (on the daily chart) on it's way lower in the intermediate term. However, Rob Hanna, whose opinion I respect, has shown a study where 20 day lows (like Monday) are often followed by decent four day rallies, so we have to keep that possibility in mind. On the other hand, today's gap higher could very likely get filled in the next couple of days, which would require the market to head lower. It's still a choppy market folks.
Meanwhile, my VIX system generated a buy signal, as the VIX fell almost 6% today. That puts the composite system at (-1-1+1) = -1, a mild sell/hold signal. I will hold cash at this time until the system shows a buy signal.
Good luck!
CURRENT ALLOCATION: 100% I AS OF C.O.B. 5/22/2017
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