Minyanville Alert: The Moment of Truth!
The rubber meets the road.
We have arrived at the moment of truth.
The bulls can deliver the knock-out punch with a breakout through S&P (INDEXSP:.INX) 1600 OR the bears will claim the dreaded "double-top" and with it, gain some much-needed self-confidence.
If my performance this past week in the markets were an '80s rock song, this would be it.
Brrr. It's lonely in the cold....
However, the only difference between being early and being wrong is whether you're there when the trade hits. I've chronicled my missteps here and here, so no need for further flagellation; suffice to say I got too big too early-I wasn't right-sized-which put me on my heels as this important juncture arrived.
The charts below tell the tale across multiple horizons.
The mid-term technical take demonstrates the importance of +/-S&P 1600. There will be buy-stops set on the other side of that price point -- much like there were sell-stops below S&P 1540 -- and that will add further spice (and volatility) to the mix, if and when.
Longer-term, you know the show, but the image is too powerful not to share again.
It's the Triple Lindy, in all her glory.
Where you stand is a function of where you sit. I'm operating with the portion of my pad that is used to big swings but ultimately, discipline must always trump conviction. While I've rolled my stops to the top end of the range, I must ultimately defer to the truest tenet of trading, that of discipline.
Market breadth is great, leadership is balanced, and gold has room to run before it smacks its head on $1,550.
If I were a bull, I would be feeling pretty good just about now -- maybe a little bit too good, but hey, they've earned it.
But we've seen what happens to bubbles of complacency, be it Apple (NASDAQ:AAPL) at $700 or gold at $1900. I would offer that US stocks currently share that rarified air.
I'm a bear in here -- a bit burnt and a tad slimmer, with an old hat and of course, defined risk.
As always, I hope this finds you well.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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