This market continues to shred the shorts to pieces and even perplex some bulls out there who didn't quite see the degree of explosion being as large as what we have seen these last 2 weeks. In that short time the SPX has surged higher over 100 handles and made new highs not seen since last November. You have to be bullish at the way the market is shrugging off bad news lately and with so many still stuck short and "not believing" the rally there is plenty more fuel for the fire. As long as traders do not believe in this move, it will continue.I keep hearing so many people saying the market is overbought and this is a fake rally. Um no. Lol, meanwhile the losses in their account are very real.
Markets can stay irrational longer than you can stay solvent, so admit you are wrong when the market tells you.
I believe we still have plenty of room to the upside in this current leg of buying. Infact, I think last week confirmed that we are headed straight to Dow 10k in the next two months. I see the SPX getting to about 1065 in that time period. That is the 61.8% retracement on the SPX from the peak of last August right before all hell broke loose; and I think it's an appropriate target for now. We are just about to the 50% retrace line so while we could consolidate a bit here I think the internals and breadth are too strong to not see more upside coming here.
Another thing to watch is the monthly chart and how July closes out this week with 5 days to go. We are very close to the 12 month ema and if July closes above that mark then it would be a very bullish major buy signal in the long term for me as this has proven to be a very reliable indicator the last several decades.
The watchlist:
Shorts>>> BA, NOC
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