Stock Market Analysis

Monday, May 14, 2018

Bear Crossing Ahead...

Welcome to Week 3 of May!

This is also expiration week for the May options so me and my RTF students are all standing by to take profit on our strategy this coming Friday! NICE!

Last week was just pristine. US Market did everything exactly what I said and closed its strongest week since March. But, like I said last week, this is when it all gets DANGEROUS. (Yes, so if you are late to the party, this could be a terrible time to be newly long) Yes, the market is now short term overbought from last week's huge gains and it is time now for some profit taking. In fact, investors and options traders echoed that sentiment last Friday by depressing bond yields as investors rush back to the safety of bonds and options traders returning total equities put call ratio to par from a call options inclined trading posture, DESPITE it being a positive day last Friday.

In fact, the Nasdaq did close negative last Friday and the Nasdaq usually leads the way for the rest of the market. As such, I would be very cautious about going newly long this week. In fact, my subscribers and I took profit on our profitable call options on QQQ last Friday. If you are going to be newly long, you really want to buy in on the dips instead as the way ahead still looks very bullish.

Yes, I expect to see a short, perhaps 1 week pullback, before the bulls return again. Trump continues to work extremely important global trade ties like how he reached out to China today as economic data continues to improve. Everything still looks good to fulfill my positive 2018 but market crash 2019 prediction.

For now, the market remains in short term bull trend within the framework of a neutral intermediate trend and a primary bull trend.


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