Well, the Fed is out of the way, for now at least .. Now we have the G20 coming up & a never ending stream of Trump tweets of course .. Which all adds to an interesting backdrop in sentiment & positioning. Some of our short-term “trader” indicators are starting to heat up a bit, as they should off the price action we’ve witnessed in recent days. They still aren’t “cooked” although that can obviously happen really fast these days.. BUT, what remains the talk on the street currently are the recent readings coming out of positioning. Basically continues to show a favorable environment for us, even as the market has rallied a decent amount here. Hedge funds have slowly been selling on the way up (thank God!), fund managers are busy building bunkers as they have built up the largest cash position in awhile, and mom/pop are scared shitless! Equity fund outflows have been jaw dropping .. All this as the market is a whisker away from new highs .. And the cherry on top of all this goodness, we have the brilliant commercial hedgers who have gotten long DJIA into the lows for the 1st time since 2015 .. So now that I’ve gotten you all hyped up to get long the whole board Friday, I’m going to repeat what I’ve been sharing with you guys on every webinar since our indicators starting to scream lean long a couple weeks ago .. All of this doesn’t mean the indices can’t trade lower. It sounds like a silly statement but what I’m saying is the edge off a favorable sentiment backdrop like we have is that there’s a high probability that any weakness will likely attract buyers. So we continue to keep an eye on our short term indicators off red price action for better entries & just as close of an eye on sweepers for both signs of where the momentum is currently & where it may be heading (rotation).
Courtesy of Trade-alert