Today's action actually makes me more bullish and glad I jumped into stocks 2 days ago.
After going up 10-15% in parabolic fashion, a 1% dip in equities actually levels off the steepness of the rise a bit on the charts.
Maybe even more important, with a big 1%+ drop on the S&P, the VIX actually went DOWN over 2%.
So all major technicals are now all screaming "Bull Market", where after a 20-30% fall (-40% Small Caps) past year, we're in a reverse pattern since the OCT lows, now 4 months in the rear view mirror.
Major long term downtrend line has been broken as well as 200 MA, for almost 2 weeks. We've briefly pierced the 200 MA in the past for just a few days, but always failed.
Blowing way thru that level AND the long term trendline for 10 days now is a strong breakout signature that I cannot ignore. As well as the recent "Golden Cross".
We actually have "Full Bull Market" on the charts, with the 20 MA now above the 50, and 50 MA now above the 200...for the 1st time in 12 months.
I'm planning to stay in equities 80-90% of the time from now onward, unless a "Black Swan" leers its ugly head.
Market trying to digest the powerful jobs report of 500K Jobs in Jan, which certainly pushes the "Recession" Fear off the table for now, but leaves a possible question for Inflation, although on that front CPI was down sharply past month. Interesting comments on CNBC's "The Closing Bell" where John Mowrey, NFJ investment Group chief investment officer, said he was super bullish, saying that this is the most hated rally in years, mainly because most large scale investors were not ready for it, and stayed positioned defensively for too long. So there's a lot more $$ that can get thrown into stocks over the next few weeks/months. In the immortal words of Birchtree "The Smell of Bull Manure is Wafting All Around...I don't think it's possible for me to be more bullish!!!"
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