1.
Active Fund Manager Exposure via NAAIM index suggests there was insufficient panic experienced in this decline. How could there be when we whipsaw back 10% and trade a 300pt range on the S&P 500. Decline at duration is needed for genuine positioning panic.
I continue to speculate more pain ahead. Extraordinarily difficult to say when, do we rally back to 5500-5700 then decline, or do we test the lows and rally followed by another decline, or do we just rally and this mostly reliable contra indicator successfully evaded panic?
I don’t think it is the latter— so more pain ahead. Should the market chop towards 5500-5700 the strategy remains simple— short with intent to visit near lows. 5700 is too generous on the range in my opinion, 5600 better. $S&P 500(.SPX)$
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2.
S&P 500 thoughts: Until the index reclaims the short term moving average, all rallies should be considered as relief. This has been a long standing criteria in my risk analysis. Pair this with market breadth and momentum and you can derive a risk-on or risk-off market characterization.
There is no silver bullet, but this system continues to serve me very well in identifying the market environment, along with developing trade ranges
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