All the all-time highs…
Dear all,
I guess I don’t have to inform you that the markets are at the highs recently. You’ve already heard this from all media. Let’s take a look at what’s next for us.
The SPX has been impressive lately. It has not only retraced all the losses from the horrid 28 Feb plunge, it is now poised to take on its all-time high, which was the height of the internet bubble many years back. As you can see, it is now pretty far off from its 20-day MA (the blue line). It seems like a pullback is long over-due and should happen soon. Partly because of the earning season, this over-extended rally may be fuelled too much by emotions. However, certain days of high volume confirmed institution participation. Going forward, we expect the SPX to test its all-time high at around 1530 in the coming weeks. This 1530 level would be a strong and immediate resistance. We are looking at 1460 as support, which was the high before the 28 Feb plunge.
It is rather amazing to have the SPX retrace all its losses from the 28 Feb plunge in such a short time. Many professionals out there are also surprised by this strength of the bulls and many believe that this has never happen before in recent times. This rally was even called a black swan by some traders. A black swan describes an event so rare in the market that it defies all expectations and usually with no clear reasons. This recent rally can be easily classified as a black swan.
Our market neutral positions can normally take on some bullishness and some bearishness. However, the recent rally has caused much stress on most of our positions. We are waiting for a good chance to exit our ailing positions. This rally was unexpected and had very small probability of happening when we initiated these positions. But it happens. Regular subscribers will receive advisories on how to exit the trades real-time.
Good trading,
Gary
