Pucker Up – One Of My Most Hated Setups

For all of the cringe-worthy commentary from the media and pundits you would think the stock market is down at least 10%. It’s not. At its worst last week, the pullback was 5%. Thursday was an ugly day after a nice rally off of last week’s low. One of my most hated setups is when the stock market forms a low, rallies but does not make a new high and then rolls over; exactly what is currently happening. That can lead to a larger decline. “Can” not will or definitely.

So the bears have the ball in the short-term. As I have mentioned, a close below last week’s low of 6630 will mean I am totally wrong and more weakness is unfolding. Since stocks look weak in the pre-market, the test should come today. I tell people all the time not to jump the gun. Wait and see how the day unfolds and make decisions in the last 30 minutes.

The Russell 2000 (below) is weaker. It will breach last week’s low at the open and the bulls need to step up strongly. It should be an interesting afternoon.

Bitcoin is below. Twice I have written that it looks like it is setting up for a trade. It is still setting up. If you’re keeping score at home, it is now down 24% since early October, almost exactly when I wrote that late comers need to be and will be punished sooner than later. This is easier to predict. I just wait for people to tell me that I don’t understand or it’s a new paradigm, like my buddy who chirped about silver at $48 that quickly plunged to $42.

Stocks could be setting up a little range here to resolve to the upside in a year-end rally. Or, this could be the whole pullback and new highs will come this month. I don’t think a 10%+ decline is unfolding just yet.

After the biggest win in years for UCONN football last Saturday, the bowl eligible Huskies (7-2) finish against Air Force. It is always great hanging out with my freshman year buddy whom I randomly reconnected with at a UCONN basketball games a few years ago.

We so enjoyed the game and the loud crowd last week, but we’ll be in Boston to visit the middle guy and then take in the men’s basketball game against BYU on Saturday night, a tall task to win.

This past week has been one steady stream of UCONN hoops with games Friday, Sunday, Monday and Wednesday. Thankfully, the pace slows now. We always love and never take for granted the raising of yet another championship banner, the 12th for the juggernaut women.

I think I was out the last seven nights and now a hotel this weekend. One was mom’s birthday. Definitely looking forward to being a coach potato next Monday and Tuesday evenings.

On Wednesday we bought SDS. We sold ORCL and some XHB. On Thursday we bought VGK, EPU and more PDBC. We sold SDS, NJNK, XB and VNM.