Bearish Setups For Another Possible Top
Ryan Mallory | Nov 10, 2015 02:57PM ET
The bears have discovered some wind for their sails as they attempt to push down this market. The only problem is that the pullback has only managed to pull the market a little more than 1.5% off of its rally closing highs from 11/3. If you consider the intraday highs from that day, it's closer to 2%. But still, the selloff hasn't been anything to get excited about for the bears.
I'm not convinced that we've reached a top in this market. I let it show me first that it is starting to break down like it did back in August before heavily shorting stocks. And a 2% pullback off of a monumental rally hardly says that. Considering how close the market is to making new all-time highs, I'll be surprised if we don't establish new ones before year's end.
The Fed also doesn't want to backtrack again from raising rates and as much as it wants to say it is data dependent, it really is driven by the market's behavior. If the market sells off like it did in August and September, there's a good chance that our not-so-good friend Janet Yellen will be forced to pull back from raising rates.
So whatever it is that the Fed does to keep the market up during the most seemingly impossible of times, I expect it to do it again if the market starts to fall. Consider that the Fed has never raised rates when the market has been down year to date. And as of this post, the S&P 500 is only up 0.8% on the year. So there isn't much room for error between now and the December FOMC meeting.
Here's My List Of Short Setups
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