Back to the long side today after observing the following setups in the final hour of trading.
First, let's review:
Wednesday was a setup day to determine how the rest of the week would turn out, whether bullish or bearish. After Tuesday's price action, Wednesday's results became largely uncertain, prompting us to move to cash.
We went long in the final hour of trading today upon seeing the following technical setups, along with other macro and technical factors that have a high probability of setting up this week to end strongly on the bull side.
A lot of traders are watching 4200 now. If we hit 4200, which I expect by tomorrow or Friday, the market won't simply stop there. Too much attention being paid to this level at this point. Expecting, at least, 4220 with the possibility of 4250-4275.
I have been saying for sometime now how explosive a level 4200 can be. We are about to find that out in real time.
Bonds next.
Traders are too deeply entrenched ahead of the PPI tomorrow. This is a similar setup to the CPI on Tuesday forcing an unwind into equities, creating a sustained bid for equities throughout tomorrow.
Lastly USD.
Exact same setup as bonds. USD investors are too deeply entrenched before the PPI tomorrow. They will be forced to unwind on most any number.
Bond and USD unwinds force a sustained bid in equities throughout tomorrow, allowing for 4200+ to be reached. Option expiration week only amplifies the volatility.
That's it for tonight.
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