Headlines: 1. The Fed easy money forever. 2. Brexit is shelved - "let them eat cake". 3. NAFTA continues (USMCA shelved). 4. China trade continues, as financial markets open up. 5. No recession in sight. 6. Earnings season - "not as bad as feared" - NABAF (as engineered by James Cramer). 7. And finally - The Bond Market reversal - exactly where I called it back in August.
Of course every time the market turns red, the financial fake news points to "China Trade worries", but that's all BS, and this rally has more to do with driving the shorts out, going into the holidays, something I've never heard reported. We've seen this story before: Squeeze the shorts, draw in the retail investor, and then take profits, and go Christmas/ Hanukkah shopping.
Red Flags:
"Germany Dodges Recession", is this mornings headline - yet the market - including Germany - is down. Good news being sold is indicative of a bear market; "Good News is Bad News"; this is a bearish signal.
Irrational Exuberance & Contrarian Indicators:
1. Of course everyone, except me - it seems - remains bullish, and the idiots at FOX Business were seeing running celebratory fireworks (graphics) as "the DOW hit it's 100th new high, since Trump was elected"? Not sure if that's even true, and I don't have time to count candles. but it's a meaningless statistic, other than the fact that the stupid meter is pinned in the red. A day earlier, the DOW closed absolutely UNCH, and you should've seen them rooting for another record close. The host even called it a "horse race", and she's exactly right! This is gambling. Greed is what moves markets. Not earnings, not the The Fed, although they encourage this bad behavior.
FOX's Maria Bartaromo called this "uncharted territory, a couple days ago, and that's a funny expression, but nothing could be further from the truth.
2. Money pouring into bearish Options, as tech bubble 2.0, cash burn, continues. I'm not going to reveal my $CPC Put/Call Ratio chart, but trust me.... Futures are already being sold in a big way, after reaching an extreme! If you're familiar with sentiment indicators, you know what I'm talking about.
Yesterday's Market Action:
Looking at the DOW
The DOW tends to lag other indices, and the fact that we're seeing that one make new highs, tells me, we're close to a major top, if not already there.
Yesterday, we saw the DOW almost bump up against the upper channel line - on the chart I have in the Public Charts area - but different time lines, can line up a little differently - even when using a DCS chart, the timeline (6 mo/1 yr/3 yr) alters the view.
For example: Here's a DCS chart I drew up this morning. Maybe this retests the highs a couple more times, but I think there's a good chance we see a little profit taking, ahead of Thanksgiving. Also note the rising 50 day ma.
Same Chart: ....27,000 - And now you can see the pre-engineered target. It's so obvious, once you understand how markets are manipulated.
The tech bubble 2.0: ...built on Streaming services, and tech unicorns lol
Stocks to watch:
$AAPL - looks like it already overshot slightly. Calls pay tomorrow OPEX - rigged
$DIS - This is the first chart I pulled up this morning, so there's nothing "uncharted" about this territory. Call Options pay tomorrow - OPEX Friday.
$PTON Peloton - We even saw a little short squeeze in this tech unicorn. Some people see a new highs, others see selling opportunities, and it looks like the bulls have already taken profits on this one. At least, they should thank the retail shorts for buying it at a new recent high!
Most important thing to watch is the $VIX, and I gave you the breakout target yesterday. Not sure that's going to happen on a little pullback, going into a holiday, but I think we're about to find out.
Opening bell rings in 5 min.
Gotta run,
AA
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