Drawing the lines through the closes allows us to get a clearer picture of what the market has been up to for the past few months — as we have remarked, more than likely an ascending triangle. In spite of a gusher day Friday price has not exited the pattern yet and has not broken to a new high — meaning contrarians could jump on it Monday and take back those beautiful points which were so well deserved Friday.
Remember the purpose of all this grinding and churning: it is to dislodge all the johnny-com-latelys and those with fickle affections. As all this grinding and churning represents wheel spinning. When the wheels gain traction the market will be off to the drag races.
And yet Friday is an exemplary power bar. Power power. As the Spanish say of a truly noble bull — un toro toro. Under normal circumstances we would be buying with both hands, but given the treacherousness of the market since December we are content to let the market show its hand (or horns). If the upper trendline is pierced and confirmed we will then be adding on — cautiously. If it looks like it’s open season on bears we’ll be right there with the old AK-47. (Why won’t they let us buy grenade launchers?)
We were ejected from our QQQ position by a too-tight stop. We are short the bonds and long the oil and aching for hunting season to start.
Call your mother.