Quit Worrying

Futures are up impulsively since about 1:30pm yesterday. Even as price spiked lower on the open, it seemed there was not enough firepower as the day went on to keep prices lower. A/Ds flipped from 2:1 negative to positive by the close.

If prices can get above the 1692 area, it appears that 1700 could become the target. These are not wave-derived targets since the waves look so sloppy. And since the waves look so sloppy, it's another reason why I think higher prices eventually materialize.

They could still materialize from the 1650 level, too. But I'm wondering now if the market is getting ready to probe higher from current levels. Hey, as long as it moves . . .

Marketwatch is running a story this morning chiding us to Quit worrying about a 1987-style crash. The author brings up many great points about why this story is likely overblown, but in my opinion, he blows it at the end by saying this:

"For now though, talk of a "crash" is quite premature. In fact, it borders on ludicrous."

Managing the possibility of tail risk in a portfolio is never ludicrous, despite what a journalist says.

As was previously seen in shares of Bitcoin earlier this year, prices can crash without any warning. The flash crash in 2010 is also an excellent example. Like a school of fish or a flock of birds, social mood is fickle, and the herd can change its tune in an instant.

But, this story is taking on a circus-like quality at the moment. Even the Fed chimed in with its own "warning" regarding, you guessed it, leveraged ETFs just like this blog warned last Thursday. I swear I did not see or read the Fed's report prior to writing the post!!!

Zero Hedge ran the story. Fed Warns Leveraged ETFs Could Trigger 1987-Style "Cascade" In Stocks. Remember, leveraged ETFs can also cause forced buying in sharply rising markets. I'm thinking the market has other tricks up its sleeves when we least expect it.