Top Down Review 12.23.2018 Bears Party Like its 2018


Welcome to this week’s review.

What a rough week for the bulls as we enter Bear Market levels on most indices and vast majority of stocks.

Clearly we are near a bounce point.  But with the upcoming shortened, low volume week ahead things may not act as anyone thinks they should.  Perhaps we chop around till after New Year’s or maybe we get an oversold rally attempt as tax loss selling abates

That said, the Bulls are on the run.  The Bears are firmly in charge.  It may be getting a bit late to short but it is too early to buy as well.  I review the markets from a Top Down perspective and note there are few longs working.  On the dark side, there are many many shorting opportunities but many have moved already.

My guess is we bounce soon.  However, that bounce is likely to be a rising wedge on many stocks and indices and we have plenty of areas of resistance ahead that likely will set up better levels to short.

Now is a time for capital preservation, spending time with family and friends and building a shopping list for longs and shorts.  That said remember, cash is a position.  Perhaps with tax loss selling abating we will see a snap back.  That would be great but keep in mind that breakouts and other up moves are more prone to fail in this environment.

I conclude at the end with my various scenarios and targets for a bounce.

Happy and Safe Holidays