“The truth is markets are made up of people, with their emotions, insecurities, their tendency to go to extremes and their other foibles. Thus, they often make mistakes and swing to erroneous extremes.” Howard Marks
“One more and we’re away
Love tender in your Chevrolet” Nothing Matters, The Last Dinner Party
Yesterday we got the strong intraday rally forecast over the weekend.
The surge faded, but there was a secondary surge courtesy of the Trumeister which saw the SPX reclaim its 50 dma.
Wall Street gorges on TACO’s.
The index backed off following a picture perfect test of its 20 dma but its beginning to resemble the prior two “clear-cut” breaks of the 50 day moving average in November and December which turned on a dime.
Follow through…in either direction…will be key.
If we Phil D Gap overhead and hold it, the door is open to new all-time highs.
That said the SPX and QQQ did trigger Triangle Pendulums on their breakage first above and then below their large triangle patterns.
The downside break on Tuesday saw both indices snap a Bottoms Line from the April low.
A drop back below Tuesday’s low should be a blaring siren that the Second Mouse is getting the cheese for the bears.
Who knows what the trigger could be to derail yesterday’s elation over TACO Wednesday in this market that has become a political mechanism.
So let’s see what the next few days bring.
Our short-term Roadmap is/was looking for a down day today.
So let’s see what the first hour brings.
If we get a Opening Range Break to the downside following a test of Wednesday’s highs the down door is open.
In sum the bears who overstayed their welcome after the Tariff Tizzy ended in April were as quick to cover as the bulls were quick to buy on news that Trump and the EU were getting married in Greenland.
Let’s see how long the honeymoon lasts.
In the meantime let’s look at an array of signals and patterns within our Hit and Run Momentum Method.
The ruling common thread in all of these examples is two-fold:
1) Multiple patterns/setups help separate noise from signal.
Multiple signals backstop the a favorable outcome.
2) Sometimes signals are just short-term in nature. Sometimes they are announcing a larger turn. Speculation is observation, pure and experiential. Thinking isn’t necessary and often just gets us into trouble. We must observe the price action, the final arbiter, to see what the tale of the tape is.
SNDK
ASTS
ASTS 10 min
WDC
VICR
SHOP
CRM
TER
FTAI
RMBS
ORCL
TSLA
CRDO
MU
CVNA