Last week was one thing. We knew it was going to be bearish, acting accordingly by bringing down our equity exposure to levels not seen since Q3 of last year.
In fact, we put on a small index short position that was covered this morning for a minuscule profit.
However, now with the Fed meeting a short time away, the market is doing its utmost to manipulate investors into a position of confusion, disallowing any firm commitment in either direction.
What became clear with the market action to close out last week was that the bears failed to capitalize on a number of catalysts, both technical and fundamental, that should have allowed them to string together much more significant losses than the near flat performance in the SPX.
The giveaway that the market is in manipulation mode came with the big gap this morning that served as bait for bears, who love to short large gaps on thin volume. Now we are getting what is seemingly a confirmation in the overnight session, with risk assets declining, led by crypto.
Yet another attempt at baiting bears and tepid longs into making sub-optimal decisions into the FOMC.
Expect this trend of manipulation at its finest to continue through Wednesday. I expect that by Thursday the market will reveal its hand, demonstrating a firm commitment towards further upside, with a high probability of NDX 18400 being taken out to close the week.
If you are trading in the markets and you don't know who the sucker is, then you are the sucker.
Fortunately, we have spotted the suckers.
Behave accordingly.
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