I am off to a meeting, but (as of 3:15 pm) I am impressed with this turnaround.
I was all set to write how ugly this morning’s fade was, and how problematic it is for the breakout thesis, when this puppy lit up around noon on some nonsensical rumor out of Europe.
It seems that the European leaders have come to some sort of an agreement about the near term deliberations. They now apparently have mapped out all of the details about their strategy for their next meeting, where they will make a plan to debate what sort of tactics they want too engage in on their next group summit to kick around an agenda for their next symposium, where they may discuss the bank problems. Over breakfast. Or not.
Meanwhile, the S&P trading range has held, and markets are still in breakout mode. Until they fade, in which case they obviously were not in breakout mode, but rather breakdown mode. In which case they will go lower, until they find support (unless that breaks) and then they go lower and find support (that holds) in which case they can reverse. Unless they don’t. If that happens, you might have been caught leaning the wrong way, which helps set the stage for the next turnaround. Unless it doesn’t. Which goes to show you how dangerous crowded trades can be. Unless they continue, cause after all we know the trend is your friend and you can’t fight the tape and its tough to be a contrarian and long and strong is the posture you want. Until it all goes into reverse, and then the trend is not your friend and you should not have gone along to get along with a tape that was a bull trap and it looks like we are heading lower. Unless we don’t.
Meanwhile, I gotta go. (Unless I don’t).