Market Pushing To Extremes Again

First, I want to note that I am still expecting that risk-off action in the market, but only once this rally finally tapers off.  Second, I do also want to remind you that I did warn over the weekend that “[u]ntil we actually begin that break-down, the market can always choose to push higher to the top of the target/resistance box on the 60-minute SPX chart.”  And, the market has clearly chosen to take us to that region and we are hovering there at this time.

But, again, I am still expecting that pullback over the coming weeks.  Yet, there are times the market takes us to extremes before it finally turns.  And, I would probably reference the late 2019 and early 2020 timeframe when the market did this to us the last time, as it extended beyond my initial expectation, but eventually turned as expected.  So, I am still very much expecting that risk-off phase to begin soon.

Overall, nothing has really changed in the bigger picture.  But, we will now need to break down below the 5644SPX level to provide us with an indication that the bigger pullback we expect has begun, with confirmation still being seen on the break of the 5433SPX region.  And, the manner in which we break down below those supports will tell us the rest of the story, as I have outlined many times before.  To that extent, nothing has changed in my view. To add to that perspective, I am personally heavily in cash again at this time. As I noted in the trading room today:

“One of the toughest parts of trading/investing is to watch a market move when you are not in it.    But, the more experience you get under your belt, the more you are willing to accept this as you recognize that it is an impossibility to get every point the market offers AND there is ALWAYS another bus coming.  This was actually one of the toughest lessons I had in my career.  I personally raised a lot of money into last week and am going to be quite patient before I consider deploying that again.  FWIW”