THE FIRST DAY OF CONSOLIDATION
Today the market stayed right in line with the range I outlined last night with a low of 1190 and a close at 1203. One of the most bullish scenarios for the bulls will be a week long consolidation right below the 1220 level. This would set up a scenario where a legitimate test of this important level takes place during the final week of the month.
The strength in technology continues to be very impressive and tells of good things ahead for the market. However, the financials will act as weight (again, this plays into the sideways thesis being correct into late next week) while their earnings are released into late next week. They should counteract one another well enough to keep us range bound until the earnings news comes to an end and fund managers can focus on how they cannot allow themselves to miss out on performance going into the end of the year. The affinity for risk should increase steadily throughout November.
I am happy being in a 70% cash position. I have 30% invested in ZSL (short silver). This is a position I initiated in the pre-market this morning.
I can't see myself taking on much more than this until late next week. I will begin looking at the long-side of the equity market again then.
Short but sweet. That's all for tonight.
