It didn't take long to figure out that yesterday's rally, wasn't going anywhere, and I used that as an opportunity to reduce my exposure to this lousy market.
Moving to +60% cash, until the market finds some direction. Risk reduction
— Veteran Market Timer (@3Xtraders) February 27, 2023
There's a tech conference going on in Barcelona, so that may have something to do with the lack of market direction, but I specifically saw Germany leading yesterday's rally, in US stocks, and immediately identified that as another suckers rally.
US futures higher, led by a suckers rally in Germany. #German $DAX #Germany #Ukraine #Russia pic.twitter.com/gGmz3Fw1yJ
— Veteran Market Timer (@3Xtraders) February 27, 2023
Technically. yesterday's rally in Europe, looks like a bounce out of the lower end of the down-turned wedge (seen on the chart above).
$DAX - A closer look shows Germany consolidating in more of a sideways triangle pattern, for the past 3 weeks, and this is a great example of the directionless market we're dealing with.
This morning, I decided to check the news and see if I could find a catalyst for yesterday's gap up - and found some fake news coming out of CNBC - where they claim that Europe is higher (6 hours ago), following yesterday's rally in the US.
This is a great example of why we don't trust CNBC's reporting:
1. European Stocks aren't higher this morning.
2. Europe led the rally in US equities yesterday; not the other way around. In fact the US seldom leads global markets anymore, and this is why smart investors are looking to invest outside the US.
Looks like CNBC has since taken that story - from 6 hours ago - down.
Tesla's German plant hits 4,000 cars a week ahead of schedule europe.autonews.com
What next?
I think since the bulls are hanging their hat on the 200 day moving average on the $SPX, we can expect to see that level taken out.
I can't say if that will be tomorrow, or Friday, or on another Monday morning surprise, but that may become clearer to me, as time goes on.
That becomes your stop out point - the 200 day ma. pic.twitter.com/651sXYclws
— Veteran Market Timer (@3Xtraders) February 27, 2023
For now I intend to sit on my hands, and wait for the next signal
Natural Gas
We did see another nice rally in Natural Gas, but I think that was due more to an oversold condition, that was created, just ahead of contract expiration.
#NatGas Rally day 4 - Natural Gas pic.twitter.com/lbNu6243gd
— Veteran Market Timer (@3Xtraders) February 27, 2023
I do have a pullback target on NatGas, and $99 get's you all the Nat Gas targets you need for the next month.
My special offer, from this weeks New Letter is also still on, although I believe our monster rally may have to be postponed, until the broader market finds a tradable bottom.
That offer can be found in yesterday's blog, under the heading, "The next big trade".
Take Care, AA
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