New All Time Highs

New record closes for the Nasdaq, the S&P 500, and Russell 2000. Amazon, Apple, and Alphabet gaining over 1.5 percent. Which of course makes complete sense as profits should be assigned alphabetically. Sorry TSLA, get back in line. Anyway, equities are on fire again and the bulls are running the show. Nevertheless I keep seeing incessant top calling in the comment section, almost non-stop for several weeks now. Here’s a little take away for you guys: Life as a trader is very easy. When looking at a chart, just ask yourself what a retail trader would do, and then do the exact opposite.

Okay, I may be exaggerating a tad but I really hope you get the point. Otherwise please email me privately so that I can send you a private invite to Perma Bears Anonymous. Now quit your sobbing as it’s time for some charts:

I keep advancing my trail conservatively, which is a policy that has served me well over the past few weeks/months. Trail now goes to 1.9R as we’re bound to get a bit of a pull back.

Now before you accuse me of being a turn coat – there are early signs pointing at a possible shake out attempt. For one risk is being priced in as indicated by the SPX plotted against the SPX/VIX ratio.

What also irks me is the rising option smile which is now starting to look like this:

I’ve drawn lines on the VIN/VIF panel to give you an idea of what I’m talking about. No reason to panic, but be aware that we are heading into more turbulent territory, historically speaking:

And there you have it. Next week statistically is a bearish one interrupted by the 2nd most bullish week of the year. So if nothing else the long summer lull is finally drawing to an end and it’s time to put our game faces on.

Wipe out on silver and we are back

The USD/JPY is producing again after a few days of sideways churn. Trail now goes to about 1.3R near its rising 100-hour SMA. I don’t think we are done yet, especially if old bucky finally finds a floor.

The EUR/USD also heading higher and my trail now advances to 1.6R. There is upside resistance ahead in the form of its 100-day SMA. I don’t put a lot of stock into that as it hasn’t been touched for a long while. But in my mind the easy run of this rally should be drawing to a close.