The last time we tested the $SPY trend-line (in June) we lifted off perfectly, ran to the top of range, but now have come straight back down. We came 1% from testing it today. For us that March 2009 trend-line now is like negative pressure, we actually now want it to break and get it over with instead of the constant threat hanging over the technical market. It’s like a big bully coming up to a 10 yr old kid and saying “I promise I’ll punch you in the nose but I’m not going to tell you when, but soon!” The actual waiting for the kid is worse than any punch the bully could come up with.
We feel it’s similar like that in the market right now — all trend-lines eventually break and we’ve come close enough now that we think the threat of a break is very real, but we just don’t know when. We’d rather just get the punch in the face now and get it out of the way instead of this constant waiting.
Our ideal scenario is a break, hit stops, put some fear in market, and then new highs. That would be awesome. And incidentally, it would also follow Joshy’s plan perfectly.
In terms of trading though it’s still the same status quo for us — buy the dips until it stops working. Again, it worked today.
Clips from Tonight’s Fast Money
1 hour ago