Pinned Action

The market appears to move intelligently in all time-frames.  By closing pinned to $SPX 1300, the market gave a decided vote of no-confidence to the legislators in Washington.  The broad index is clinging to the life raft of large round numbers.

We are at key moment in history right now.  Stay above 1300 and continue the rally or choose the red pill and plumb the depths.  I personally feel the bullish scenario has a MUCH higher probability until the market says otherwise.  We’re currently sitting short term oversold after solid gains.  Once we consolidate and digest all the news this area should serve as a solid launching point for the next leg of the rally.  This pattern will play out many more times in the coming years.  For those who don’t know, this is the famous “Wall of Worry,” and this is what it feels like.  That said, the prudent move is to stay small and stay nimble.

I’d have a much different opinion of these events if we were rallying into the news of debt ceiling resolution.  Then we’d really be screwed.

 


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