After Friday morning's pre-market volatility, the S&P stabilized and eventually closed strongly. In the overnight session, it hit not one, but two new highs. I think we'll see another one at least in the regular session, above 1315.
I'm taking a step back and viewing it all from a 240 minute chart. There is a beautiful trend line drawn from the Nov 5th highs through the January 18th highs that targets just over 1316. I want to be short there.
A quick comment about the Super Bowl ads. I like to watch them for the same reason that I read the September issue of Vogue magazine each year: they are important barometers for social mood.
I was surprised (appalled is probably a better word) at the level of gratuitous violence in many of the ads. Even worse, many ads used violence to try to get a laugh.
This sort of gallows humor indicates a zeitgeist that is experiencing a deep sense of unease.
A few ads went even further, using dramatic, epic themes that depicted a struggle between good and evil. Like magazine covers, the reason why we're seeing them is that they reflect our subconscious feelings.
So if Americans are struggling to come to grips with the present, what could this possibly say about the S&P?
Perhaps that it's going through its own struggle: is it in a new bull market, or is it in a bear market rally?
I expect the struggle to continue. And from a long-term perspective, that could mean higher and it could mean lower. Mostly I think it means we must play both sides.
That is, we must continue to be traders.
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