I'm learning the more you think about providing for peoples basic needs, in a lights out situation, the more involved it gets, and you can spend as much as you like. Anywhere from $100, to $1000, to tens of thousands of dollars, on everything from electric generators, to home defense, but I'm just going for the basics, and hoping that, if the grid does go down, it will be back up within a few weeks. Thinking about starting a separate blog on the subject.
Market Update:
In the last update I predicted the market would continue to hold up into OPEX, and Friday is options expiration. So far so good. I also included a Citigroup chart, that was holding up, but that chart has since broken support. Could be the hedge funds, who constantly target me, just wanted to prove a point... but I have to trust the charts. Every new market high is being dumped, as I pointed out yesterday on the 1 min chart below.
Getting back to financials for a minute: The long term $BKX continues to trade into what looks like a broadening top pattern, at the top of the range we've been watching for the past few years. See the larger broadening pattern labelled 1-2-3-4-5. That's a major topping pattern. Could hold up a few more months, but I believe we're going to see a prolonged bear market commence in early 2018.
Another sector which I'm expecting to lead the next pullback is the healthcare sector, and there is a 3X leveraged health bear with the ticker symbol $SICK. This is a thinly traded fund, so be sure to use limit orders, and exercise extra patience, when trading in an out.
Healthcare $XLV - as far as timing; when the 50 day ma breaks you know what to do.
I do see a scenario for a sharp pullback, which could start as soon as this Friday, and continuing into early next month, but only if the $VIX can breakout above 12, and keep running. As I look at the $VIX this morning it seems more likely that we could see $VIX 8.50 first, and capitulation for most bears. That would correspond with another higher high on the $SPX, and the DOW.
No doubt in my mind the powers that be want to draw the bears in, ahead of the Thanksgiving holiday, and that's only 6 weeks away? That's not much time, but once key support (our stop-hunt @ 2548) breaks you're going to see panic selling, like we haven't seen in months.
$SPX - the upper pink line is our stop-hunt. Maybe it gaps down below that level? The red arrows show a hypothetical flash-crash in wave 1, in a bear market. which would certainly lead to several short squeezes - on the rebound - going into the end of the year. Most traders will dismiss the crash, and call it a pullback, and the MSM will chalk it up to "the new normal". Remember the '08 crash actually started in '07, but even today, few recognize that fact.
Before you get too bearish, too soon; I'd like to conclude today's update with the short term $RUT chart, which continues to consolidate sideways. Looks like wave 4, which should end with another slightly higher high - in wave 5 - which you're going to want to sell.
That's all I got, and I'll be away from my desk much of the day.
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