Tuesday, lucky Tuesday. The markets took off today in what is an apparent confirmation of what we have been saying — the bull market is on. (Don’t get too happy here. It’s always when you’ve won the lottery that you discover that someone has picked your pocket.) Also, what we have here is a 126 day wave without a downwave. On the positive side the wave has had several minor downwaves and sidewaves. We illustrate:
So it has not been an unrealistic run. 3 minor downwaves and the sidewave of March. By the way are you humming to yourself, Sell in May and go away? The foolishness of nostrums like this is amply revealed by the chart. When you obey cycles, or fibbonacci points or Elliott waves or Gann lines you stray from the zen principle of dealing only with the reality in front of you, without layering potential confusing information on top of it.
Line A here is the early warning line. A serious break of this line would arouse concern. But it is lines B and C (from 09) that will tell us the long trend has changed. And they are about as far away as Patagonia.
Meanwhile it looks like you could just pin the Barrons price reports on the wall and throw darts at them and find a good trade.
XBI the biotech ETF, breaking away.
DXJ Japan ETF taking off because of the downtreand in the yen, which we shorted with YCS.http://stockcharts.com/h-sc/ui?s=YCS&p=D&yr=0&mn=9&dy=0&id=p31971815165&a=302676625
YCS — late in the day, but when you’re late to the party you start small and plan to increase according to the chart.
We are watching this longish wave with great interest to see how it ends. In light of the length the downwave will probably be hard and fast. If not it means this bull is more than a little strong. Good players know that when you have the edge you play your hand big. Don’t take this as encouragement to get beyond your comfort level. That is always a mistake. While we have made a number of trades the last few days they were small and exploratory. The time to go all in is at the bottom of the next sell off.