Market Update

I'd actually prefer to see the market move sideways from here even though I'm fully loaded up short with a little room to add from closing GLD puts earlier, I'll be saving that for the right opportunity.

I'd like to see a little more time as there's a process to a reversal and it gives us good opportunities, strong signals and is most often the way a reversal unfolds.

The problems are I don't see the breadth to support the market; parabolic moves like this one (below)  tend to end in as spectacular fashion as they start.

 I'd almost never forecast the bottom as anything other than a longer reversal process, which is what we see at least 90% of the time, but in fact we did forecast a quick upside reversal "V" reversal because it was the most effective way to achieve the goals of this move.

In like manner, a sharp "V" downside reversal would also be most helpful in achieving the goals of this move as recent bulls would be trapped, the same theory as was drawn out Monday as we had a rounding top and a loss of upside momentum which would create doubt in the minds of longs which were difficult to get on the other side of sentiment from their previously bearish position, the move yesterday was almost a way to lock them in, to convince them "This is a real move, this is a real change", which is what we predicted this move would be all about before it happened as you can see in last night's Daily Wrap as we look back to the forecasts previous to the move starting and our expectations.

In any case, Plan your trade, trade your plan", it's the emotional stuff that makes that hard, but I'm where I want to be position wise, I'm just looking for hints as to how this is going to unwind from here. I suspect the real market view and movements are going to come overnight when people have little chance to react to them.

I have little doubt that we are headed down, my job right now is determining in which fashion. As I said, it doesn't matter too much either way a I've already traded my plan and am set up other than a few possible additions  from some recent dry powder, however as always, I want to give you the most accurate forecast possible.

I just don't see much right now beyond what I've already mentioned and shown that adds any insight, these periods never last long though. In fact it was October 14th, the day before the bottom and upside reversal that I said in this post, Market Update ...

"Today feels exceptionally dull, those tend to be the most dangerous markets."

The reason being is they lull you in to a sense of complacency and that's typically right when the market does something extreme as it did the next day.

Right now things feel a bit dull as opposed to what you might expect on a day like today, but don't be lulled in to complacency or expect this to last long, it never does. I'm sticking with the most probable outcome, sticking with the shorts opened.