Playing Around Near The Highs

While I would love to provide you all with certainty in the markets, sadly, certainty in most areas of life simply does not exist.  So, we resolve ourselves to playing this “game” in the stock market with probabilities.

Over the last several weeks, our analysis has suggested that the SPX is in a b-wave rally. And, yes, b-waves can make higher highs.  In fact, the most glaring and extreme b-wave high I have EVER seen was the high we struck in 2020.  And, truth be told, we have a similar set up currently , but not with the same potential extreme high b-wave.  Rather,  it would seem the market is setting up a c-wave decline, which could be a sizeable decline similar to the Covid Crash, but I have no signal that it will be equally as fast.  In fact, I doubt it will actually be that fast, even though c-waves represent strong declines.

Yet, I have no reason yet to enter into bearish positions to trade that potential.   You see, in order for me to be more confident of a bearish pattern playing out, I still need a 5-wave decline, which AT LEAST breaks the 5155SPX region.  Until such time, this market can still try to extend this b-wave rally.

So, while the market seemingly consolidates near the highs, I really have no reason to turn bearish just yet.  I would imagine that my perspective in my positioning is quite neutral, as I really do not have a lot of money deployed into the equity market, other than a handful of individual stock positions - outside of metals and oil equities.  But, I certainly am on high alert for a potential 5-wave decline which breaks below 5155SPX.  At that point, I will likely begin to don the bear suit.  Until that time, it remains hanging in the closet. . . after coming back from being recently laundered. (Smile)