I see dozens of readers heading my way with torches and rope. Bar the doors Egor we are going to hold our ground.
As I said in my market wrap tonight there is nothing lonelier than standing alone on the sidelines in cash while the bulls race ahead. Actually there is one position even more forlorn than that. That is the newsletter editor with no plays in a bull market. Not only am I frustrated for me but I am frustrated for my readers as well.
I am going to reprint here the chart of the Russell that I used in tonight's market wrap. This is what I expect to happen. Whether the lower high comes here at 601 or maybe even 610 but I do expect a sell the news event that is blamed on earnings. There could be any cause but economics and earnings will likely get the blame.
The S&P-500 chart illustrates the problem the market is facing. There is strong resistance from 1060 to 1075. After the strong rally in Q3 the market is priced to perfection and I worry that fund managers will take profits sometime between now and options expiration on the 16th. That could drag on as late as the 23rd but I do expect profit taking.
I believe the next dip to a lower low will be the one to buy. If it does not occur then we will board the train when the S&P moves over 1075. Until then I see nothing to play. I firmly believe that a long play entered today is borderline suicidal.
Please be patient and let's wait before making any plays.