Just another manic Monday.
Europe gapped higher at their open (3am) and took our indexes up with it as no volume, of course, so we'll have to see what sticks but I already put up shorting lines for our Members in this morning's Live Member Chat Room. Essentially, we're just shorting at the same bounce lines I laid out last Tuesday so nothing has changed – except it's Monday, not Tuesday. Today though, we added the Nikkei (/NKD) short at 17,350, as strong data from Europe should strengthen the Euro and weaken the Dollar a bit (98.60).
This has, of course, been going on all year in a generally flat market, though that hasn't stopped us from ranging between 1,800 and 2,200 on the S&P – more than a 20% variance from highs to lows. Logically, 2,000 is then, the middle of the range yet, despite 65% of the S&P 500 trading below their 50-Day Moving Average, we're still much closer to the high end of our trading range.
Clearly the so-called smart money has been fleeing the markets all year, as evidenced by JackDamn's cash flow chart, which illustrates the massive outflow of money from the 500 in 2016. Think of each block of outflows like Jenga pegs that are being removed – even as the tower is built higher and higher. You KNOW what will eventually happen – you just don't know exactly when the whole thing will collapse. Given that the outflows are increasing at the moment – we should keep a careful eye on this indicator.
Oil (/CL) Futures tested $51 again early this morning but is already back to $50.34 so too late to short it if you weren't paying any attention to the last 3 week's worth of posts, where we shorted at $51 over and over again. Speaking of last week's picks – you can still pick up Natural Gas (/NG) long as it crosses over the $3 line and use that line as a stop so very little to lose and much to gain on those futures.