Well – the markets keep surprising all of us – by going higher.
It did surprise also me – as I m quite busy in setting up some models and systems…even if I wrote few month ago the solution of the conundrum.
I wrote that Crowded Trades (where everyone thinks and does the same in the last two years does not work in this period).
Since start of April, everyone and his dog has been very bearish on the market and bullish on gold. Once every one thinks like that, the market goes in reverse.
Until when? Until, like now, people are starting doubting their bearishness or their idea of being long gold – which could last well into all June.
Remember what happened in December…everyone was scared of the Fed hike….the Fed hiked…all went well for the next 10 days and then January started the killing fields.
The market could well behave like this until the days after the 23 June Brexit – and then go for a kill.
Or if you want to be less sanguine – SP500 2,040 to 2,130 NOTHING HAPPENS (or ASX200 5,000/5,400 or Gold USD1,200/USD1,300) – it is a simple consolidation pattern (weakening as, between others, there had been no breach of the top, till now, and an intraday breach, of the bottom support).
So hold on to your beliefs and don’t chase swinging modes, we are in uncharted territories after all. As in the old maps “Here be Dragons” (or more correctly ‘Hic Sunt Dracones’ from Latin)
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