We have often remarked that there were three kinds of trends: bull, bear and mule.
Mule being that market which stubbornly sideways until we just want to get a .45 and terinate it. (In the South we have a joke about this — which goes, how do you get the attention of a mule? First, you get a two-by-four….) No one is going to get the attention of this mule, which insists sideways since the panic sell off of October 10. As of this point nothing nothing has been decided. On the port side of the mule are the early and bold grasping for cheap stocks. On the starboard side are nauseated and frightened undecided voters throwing up their stocks. In the stands we shorts ourselves wait to see who the winners will be. Then we will bet on the winners.
Here is the 30 minute chart which clearly illustrates the struggle. Looking at the daily chart below it strikes us that no sufficient test has been made of the October 10 low, though Mark Hulbert opined that the test had been made and that the market failed — i.e. was going to go lower.
A trading range has been set up and we see no reason to switch from short to long at this point. We will be commenting further on this and gold and the dollar in the next day or two. If we were liquidating stocks here for any reason we would be going to cash, not back into stocks.