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Thursday, January 11, 2018

Market Update 1/11/2018 - The Market Top

Got a nice little pullback on Wed, after identifying the top on on the NASDAQ on Wednesday.

Those who were watching my Twitter feed, know I called the market top in real time, and watched it break down going into Wednesdays close. Not an easy call!

And here are tweets to Document that "Market Top":




The only reason I timed this reversal, is because I happened to be watching the NASDAQ (15 min chart). If I was only watching the #SPX, & the DOW, I don't know that it would've been so easy... 

"Stall" is an aeronautic term I remember from flight training. A plane in a steep climb can "stall" out in the same way, if there isn't enough momentum to overcome gravity.


This is what the pullback looked like at yesterday's close. Simple A-B-C correction.

And after yesterday's bullish close it look like we're off to the races again.

Maybe we get another pullback into the close - setting another bear-trap for Friday - but I wouldn't count on it.

Yesterday's bullish SPX chart:

The fake financial news at Bloomberg was trying to say the Japanese bond market was to blame for the pullback, and CNBC is blaming Canada, and China... but this is how they make their money, manufacturing stories. I make my money being right. 

Of course I haven't been right on everything:
I saw the pullback in Silver coming, and the recent top in Nat gas, but oil? 

Oil continues to rally higher...

$WTI crude target raised to $65. I'm expecting Oil to reverse, within weeks, and this may be the catalyst for a big market correction, since many folks are heavily leveraged in their oil trades, and "the baby is thrown out with the bath water", when margin calls start coming in. Forced selling...

This is how I would trade the top in Oil. Sell the target, and then add when the stop-hunt is taken out, and then sit back and enjoy the show... it's going to take plenty of time for these oil trades to unwind.

There's a possibility oil consolidates into a bullish wave 4 (of C of (Y), and before a retest of the top of the channel, later in the year, or maybe it trades into a little topping pattern, but we'll worry about that road when we cross it. Even if wave C doesn't complete on the first test... wave A of 4 is a good trade.

That's all the time I have this morning. It's 50 degrees in Chicago, and I'm going to take advantage of the weather, and install a pass-thought on an exterior wall, so I have easy access, for generator cords, and propane hoses, just in case the SHTF in the middle of winter. We've already seen power outages on the East coast, and another ice storm coming, and the Las Vegas technology even experienced a black out.... Don't be caught in the dark!

I'll be away from my desk most the morning...
Take care,
AA      

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