The SPX is STILL in the zone I highlighted weeks ago as per attached chart. We can only profit on directional moves if there are directional moves, to state the obvious. The NDX meanwhile hit the highest 10 day RSI seen in 18 months. The latter can actually be a bullish scenario but only if the market can back that RSI off by moving sideways. The other thing that needs to happen for the bulls is the market participation needs to broaden. Recall that over 80% of the gains in the broad market averages are attributable to AAPL, GOOG, TSLA, NVDA, MSFT. The rest of the market, particularly the mid and small caps, have languished. The Dow 30 which represents less tech and more of the actual economy… ie things people buy for regular life… has also been much weaker. Additionally option positioning, which is a huge factor on a day to day basis, is less supportive of bulls than it has been for some time. So with leadership stretched, I don’t see any strength on the immediate horizon without consolidation in the NDX leadership technology, and broadening out of the market participation to the IWM mid caps and the DJIA economy stocks including the Transport index. Additionally market PE is higher now than it was at all time highs. So it’s a tall order for bulls.
If the market has a dip and we see a change in leadership with the weaker stocks of the last few months becoming relatively stronger, the market has a chance to rally after that. But for right now, I am not chasing any longs, and my SPX short didn’t prove fruitful. So not looking to add short either. Flat is a position. And that’s my position for now.