Back to BOT Long on the sp500

The market evaded any near term bearish signal yesterday and is now set up to tread higher above 1230.  There exists the extraordinary possibility that the market may turn the previously potential bearish monthly MACD histogram setup into a bullish one.

That would occur if we see November and December 2011 closes higher as up months and if the December month closes above the monthly high of November 2011.  This would completely invalidate the ultra bearish scenarios.  It seems to have a favorable chance of occurring given that we are in the traditionally strong end of year quarter.

This entire correction has simply been a Wyckoff retest of a previous breakout area whether we look at the Dow, SP500 or the NDX 100.  The retest is the most clearly seen on the NDX100.

Once again I think the most important lesson out of the last several months is that one cannot trade based on news.  And that one cannot trade on longer term time frames based on news either.  The Europe news all sounds extremely bearish, but the bottom line is that Greece falling into the abyss does not prevent me from buying a cheeseburger, a snow blower or an Iphone right down the street here in the good ole USA.  And strange as that may sound, the previous sentence describes almost exactly what we see going on in the USA markets versus the European markets.

The bulls win once again !!! And it is not recommended to keep a bearish bias into the end of the year.

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