The Dow charged on through to make a fresh new high yesterday. Likewise, the QQQQ, after a slight dip early this week, put it to the put buyers (pun intended) and blew on to new multi year highs.
Incredibly, shorts, who played a large roll in getting this rally off the ground as they covered their puts bought on Tuesday, decided to average up and they bought more short positions yesterday. Put buying was more than 2-1 bearish on the SPY again yesterday.
Won't these guys learn you can't call a top in a bull trend?
Apparently not. Nevertheless, they are contributing to the rally and as long as they continue to try and short strength, strength is going to beget strength as their short positions unravel and force them to cover at higher and higher prices.
Today's scans revealed the best set ups we have seen in months and months. We are finally getting reliable chart patterns. We finally got the signal to get aggressive.
Note: we predicted this breakout on July 02, when examining the longer term market outlook. This is a significant event that should lead to some strong gains this summer.
2 comments:
Does this mean the the June 27 low is going to be the low for the year?
It's impossible to say. However, seasonality would indicate that we have indeed seen the low for the year.
Our intention is to stay flexible. The market is strong here, so we will get agressive. We are agnostic about how long the market will stay strong. If it changes, we will do our best to change with it.
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