It is Tempting to be a Seller

It is so easy to sell this market, we almost got involved in selling yesterday when we started thinking more about technical signals and profits rather than the underlying psychology of the market.  The market is at an important juncture again and the so-called smart guys who pontificate on CNBC are spewing a long list of reasons of why this market cannot go higher.  Sellers are everywhere and we all know that is not a condition to use for selling.  We need excited buyers to put in an intermediate trading top.  We don’t have that now.

Basically there are three views of the market at the moment.  A majority view is to sit on your hands and wait for a signal that the market has bottomed.  Another view is that the market basis the S&P is topping out here in the 820 to 840 area and will go down and make a new low at 640.  And lastly there is the view that the market will break out above 840 and that will become a base for a wide market range of 840 to 1040.  We are of the last view.  Until yesterday we were concerned that the market did not have the power to launch out of here, but things seem to be changing.

Gold, the dollar, and T-Bonds, are part of a mix on conflicting confluences that traders find perplexing at the moment.  This is based on the fact that the Treasury auctions did not go well yesterday and bond interest rates rose.  Gold then rallied a little bit because the market reasoned that if the treasury cannot sell bonds then the opposite will happen, the Treasury will buy bonds by monetizing the debt.  What more likely will happen is that T-Bond rates will settle in higher than the artificial rates pushed by recent Fed actions and these bonds will sell to outside buyers.  So we continue to watch the gold market for signals, 930 is kind of a pivot point at the moment.

The EMA ETF Fund NAV was 981 at the close yesterday.

8:01 AM CDT