A new day and a new denial regarding yesterday's Reuters rumor that the ECB would be buying Corporate bonds which was promptly shot down yesterday as a rumor by the Financial Times as Reuters has done some strange media relations in the past for Central Banks. Today we have another denial or retraction of the story that drove the Euro down and the market up (Draghi, Reuters, what's the difference as long as they teach the F_E_D how to jaw-bone your currency down without actually doing anything), this time it came right from the source, Reuters retracted the ECB bond buying bit or at least made the facts more clear, there isn't any, there aren't any plans for any.
As for the market, as you saw last night we are deeply overbought on a short term basis, there's still a huge amount of gas in the tank to drive the market higher as we had accumulation almost all of October, but we're running on 3 tires with that sharp "V" base. As you know from my SQQQ position yesterday, I believe we'll come down, create a bit of a larger base and finish the upside job, of course we want to verify as we go as always.
One thing that certainly has changed since Friday are the 5 and 7 min charts in Index futures, they are clearly leading negative now so it makes it a bit easier to believe we pullback in the near term.
For example...
With everything else overbought, the 3C signals in the averages, HYG, etc. I feel good with the SQQQ position, but I'd like to buy a strong base, despite the last 3-days gains, I still would not have bought that "V" base, there are just too many ways it can go sideways and getting lucky it didn't isn't an investment strategy.
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