07Feb11:01 amEST

We Can Draw Lines Any Way We Want

One of the more challenging aspects of real-time, hands on charting software in the social media age is maintaining a certain degree of objectivity and consistency in our analysis. After all, we are the masters of our charts, at least superficially, and are therefore capable of drawing lines any way we wish. 

But if we are going to be on the level, so to speak, then it is imperative we stay in touch with the actual message of the markets. 

At the moment, equities are coming in after drifting higher for the last few weeks. Bears are looking for a complete rollover, perhaps back to the Christmas Eve lows, whereas bulls expect this dip to be short-lived and, ultimately, a quick reset before a push higher yet.

On the 30-minute chart for the IWM, ETF for small caps, the initial bounce by bulls this morning off the opening push lower is being met with selling as I write this. If bulls cannot reclaim $150 today on this ETF my thinking is to further reduce long exposure for the near-term and let bears have a crack at their thesis. 

Separately, some pot stocks are trying to sustain a re-rotation. Names like ACB CGC PYX are tempting longs as they flash green here. But even in that niche I am seeing fades to red like in APHA and NBEV. A little patience goes a long way, indeed.

And I suspect the current market calls for just that. 

Stock Market Recap 02/06/19 ... Playing Hard to Get


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