Ukranian Wedge

Weekend Update # 1

I have to say that I am a little uncomfortable with things at the end of this week. The atrocity that has rained down on Ukraine is the most senseless thing I have seen in all my years. I strongly encourage sending money to the UN Food Relief Effort. One good thing that has come out of all this is the realization and confirmation by the whole world that Trump, Tucker Carlson and Putin are the three most despicable people in the world.

On the trading scene it has been an eventful 34 trading days since I covered the short S&P position on January 24th at 4273. The trading pattern since, the predominate 4224 to 4390 range, has been a little nerve wracking. The bounce to 4600 was easy, after that I have had to short rally’s and buy declines, each time feeling a bit uneasy with the news that created those moves. And tonight I do feel a little uneasy going into the weekend on a trading buy signal, considering that Putin and Powell have the control buttons at the moment.

Things I see at the moment are:

  1. My email inbox keeps getting clogged by advisors touting what are very visible bearish charts. I see and acknowledge those charts, but I also know that bear markets where you can be a big short tend don’t tend to have so many touters, even Louis Navellier is bearish.
  2. There is a lot of news especially with all the effects of the Ukraine invasion, that should be negative for growth in the short-term.
  3. On the other hand, if there is anything that the market has taught investors over the past two years, is that stock prices have little to do with economics. Funny money, Fed Balance sheet, is the key factor, and unless I get really surprised, I would expect to see the Fed leave that alone for a few months, as a little protection against a recession.
  4. I am waiting at this juncture for medium term direction. With the FED meeting this coming week we should see some confirmation as to whether the FED effect is bullish or bearish, and then jump on it. I expect them to step lightly.
  5. And here is the Ukranian Wedge Chart Formation..,.it keys off the February 24 date. Uou can see the red downtrend line and blue horizontal line defining this setup.

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