Latest thoughts by Tim Knight at The Slope of Hope
Timeframes and Actions
- Open to the possibility of S&P getting as high as 1120
- Have opened up about 10% of intended short positions already. Vast majority of accounts in cash.
- Have a small number of long positions, and a pretty big SSO position to soften the blow if the rise continues; occasionally briefly trading ES for pops and drops. Long /ES as of this writing.
- Opportunistic day-trading ETFs when risk/reward seems heavily in my favor
Medium Term (Next Few Weeks)
- Think likelihood of trend change very strong;
- Going through all stocks in advance and preparing target entry points and stop prices;
- Intend to hang on to already-established positions and ratchet stops down as needed
Long-Term (Months/Years)
- Believe people who are planning on a new bull market are incorrect;
- Think slow, grinding bear market will continue several years;
- Believes major government policy shifts and social unrest will accompany bear market;
- Will trade infrequently once bulk of positions are in place
Got it? Good. Thank you.
A Close Look at the Russell 2000
The /ES continues to grind uncomfortably and annoyingly along its descending trendline of resistance. It could, of course, pop above it at any moment. Given the fact the trendline isn’t even a week in length, a break above it wouldn’t be explosive, but it would be another carpet tack in the coffin of the bearish argument.Some might assume, based on my disposition, that I am massively short the market. I’m not. I have about 10% of my buying power deployed in short positions. I’ve got 3000 shares of SSO to ameliorate the market’s strength. I’ve been spending virtually all my time getting ready for, but not executing, the trades which interest me.The Russell looks like this right now:
Operating in the favor of the bulls………
- Broad uptrend still very much intact;
- There’s about 8% upside from here before the major resistance at that rectangle
- And, just now, AA reported earnings which the market seems to really like.
In the bears’ favor……..
- Trendline breached;
- Massive resistance overhead
Looking closer, we can see the series of lower lows and lower highs, but one good strong day higher could break this:
