Fifty Thousand Foot View
Tim Knight | Mar 26, 2017 01:43AM ET
I am spending my weekend in Denver, so I think I’ll just share a few charts as we prepare to enter the “Repealing ObamaCare Was a Dud” market week.
First up is the Dow Composite. I’ve tinted the topping pattern, and we have a nice little shooting star candlestick on Friday.
I am, as you might guess, quite short the market, and I also flipped to bearish on precious metals miners last week. It’s still a little “iffy”, but this could turn into a meaningful drop.
The index I follow most closely each day is the Russell 2000, and I think the path to 1300 is fairly clear. That’s not a monstrous drop (not even 5%), but it’s something.
Aligning with this bearish view is the configuration of the S&P 500, whose delineation between support and resistance in the short-term I’ve illustrated with that red horizontal.
Amongst the Dow indexes, the Transports have been the weakest recently. It has three failed attempts to break out, and now it’s slumping.
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As I’ve mentioned, I intend to hold shorts and expand my positions until such time as we get a decent volatility event. In the heavily muted environment we live in these days, a VIX in the high teens would suffice. It looks like we’re already revving the engines.
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