First of all; wish all of you Merry Christmas and Happy, Prosperous New year.
Isn’t it wonderful to put your trading on auto pilot? When you have taken a position and you know that it is going to be achieved. No more anxiety attack and looking for intraday signals. At least I find it much better this way.
Yes, the rally is not a normal, fundamental driven rally. It is a Santa rally. Fairy tale rally. But who cares? At the end of the day, if we are on the right side of the market and have been able to take our profit, we would be happy, even if the profit comes from a non-fundamental, economically bad rally. That is the reason I keep telling my readers, please do not mix economics and trading. And possibly, stop reading blogs which espouse conspiracy theories and have so far convinced you that everything is fake and should be sold.
Every day morning, before trading starts, I tweet my readers my take on the market and how I expect it to perform for the day. Normally that’s how the trading goes, irrespective of the news flow of the day. That just proves that news is noise. The markets action tells you the future. Looking beyond the obvious helps.
Anyway, here is a daily chart of SPX with lots of straight lines. As you know the quickest and shortest way is always a straight line. And sometimes, simple things are true.
Today we broke the six month downward sloping line. That is good news for the rally. We also broke past the 1st price target, which was the closing price of December 7. The next price target is the closing price of October 27. If we can close above 1284 area of SPX in the next few trading days, then we are looking at a blow out top. That would convert lots of doubters who are still sitting outside and not participating in the rally. By that time, most of the easy money would have been made and what better way to convince the sheeples about the new dawn, than breaking the closing price of July 21st.
Remember folks, it is a game played at different levels and with the collective mind of the investors as well. I urge my readers to take a print out of the above picture, keep it posted in front of the trading desk and ask yourselves every day, where are you in terms of the market sentiment. If you are feeling comfortable with your sentiment and they are in line with the general market expectation, possible you are next in line for sheering.
Have a wonderful Christmas weekend with your loved ones. Thank you for following me in Twitter.(@BBFinanceblog) I know lots of you have great following, so please retweet to your friends and followers. You could be giving them the best Christmas present, for all you know. Visit http://bbfinance.blogspot.com/ regularly and profit from the World of Finance.