Where to from here?
Scott here, with a belated market update.
Basically what has happened here is that we broke to the upside out of the triangle formation, retested it, and the shorts who were forced to cover started a short squeeze which has lasted until the present.
The weekly chart shows we are at a fascinating juncture. More or less the market faces a test here. If it passes, we are going to start a larger scale short squeeze, leaving the weekly firmly embedded in the upper bollinger.
In other words. If we keep going up from here, the bear case is dead.
What’s the bottom line here? Since nobody has any idea at all if we pass or fail the current test, get out of longs now, and give yourself a pat on the back. Don’t get short, but start to look for short positions if we get a retest of that high.
If you do get short, do not overstay your welcome. We have no evidence of change of trend. If the real trend is down, there won’t be any debate about it, it has to look like 2008 part deux. Anything but that, and its get your long trades on.