One rydex indicator is giving a moderate sell signal now. As I've noted yesterday, perhaps there's too much complacency regarding the end of the year rally people are expecting... including many bear clowns I track. Bonds are also acting badly here which is not good. Anytime I've warned about potential market weakness during the past 4-5 weeks all we've seen is marginal weakness or market resiliency. But we haven't seen the market take off either haven't we? The market will often frustrate the maximum amount of people possible before making its move and I think that's what this trading range is doing.
Tomorrow we have the fed meeting and it's usually followed by volatility. People will be watching carefully for hints of when rate hikes are coming. There's a good chance given current conditions that any strength following the fed meeting will be faded. I may decide to play this trade depending on how things look.
Bottom line: Be on guard for more ST weakness either tomorrow or Thursday. It's not a lay-up but I see vulnerability.
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