A few weeks ago some perma-bearish clown showed up and began to mix it up in our comment section. It didn’t take him very long to get squashed by the mighty ban hammer as he immediately began to challenge and offend half of the posters here, including yours truly. I don’t usually comment on trolls or clowns but this particular incident turned out to be highly educational and thus should serve as a stark warning to the rest of us: Never ever bet the farm on a lottery ticket.
If I were to use a reference in popular culture to describe what’s currently unfolding in equities then I’d probably point at Walter White walking into the local drug kingpin’s lair with a bag of fulminated mercury in his pocket [episode 1-6]. Up until this point he’s merely been toying with evil, skated around embracing it, conveniently rationalizing his growing series of illegal activities and the drama he is about to unleash.
I can’t believe I’m actually saying this but there may actually be a chance for a short term correction in equities. But let’s not get ahead of ourselves, shall we? The current bullish trend isn’t even close to being threatened yet. And although we are seeing bearish divergences on the A/D and other momo indicators equities have proven many times over the past few years that they can stubbornly continue upward for weeks or even months on end. That said, let’s review what we are up against here:
I feel rather conflicted about the price action over the past month and quite frankly that’s exactly how I should feel and thus act accordingly. Just take a look at a daily E-Mini chart and compare the March contract (ESH7) with the current front month (ESM7) and tell me what you see.