Quad 1-2
We are still in Micro Quad 1-2.
Yes, we thinned out a bit, and we need a consolidation here, but nothing scary in the cards in this week’s tape.
ARKK broke out to bullish trend 8 Weeks ago and is holding bullish trend:
Breadth looking a bit toppy here, but again, healthy rotation is in play since weeks and I do not see any major red flags:
ARKK bullish trend not a bad sign ;-)
Almost all Quad1-2 exposures have upsloping 20 week moving average on relative strength:
Quad 4 exposures are nowhere bullish trend:
I still see a ton of non-believers in this rally, tons of people bearish and they cannot answer the question what it would take for them to turn bullish.
AND this is a very good sign for this rally to go on because trends need skepticism and a positioning where a ton of people are not positioned in or against the trend: the moment everybody has the same opinion and is long (in an uptrend) or short (in a downtrend) trends fail —> This is not the case now!
The best traders are in trends not a lot of people believe in and are not positioned for the trend or even go against the trend.
https://twitter.com/MacroOps/status/1276205912013840384
Now a ton of people ask me for reasons.
Here are two:
First of all, the market is frontrunning economic data and that can be traded via the micro quads. And even if you are great on forecasting economic data, the reaction of the market is much more important!
[ Here is a very good video by Jason Shapiro on the subject:
https://twitter.com/Crowded_Mkt_Rpt/status/1681727490991988736 ]
The second reason is more strategic and only investors should care, traders should not care, but even for traders those reasons are not too bad for conviction if they see a bullish trend.
The best traders do not need reasons, but I am not one of them, so I try to find reasons (at least strategically).
Twitter is full of stories that the end - especially for the USA - is near. Fear sells, we are wired for it!
Interesting enough: almost nobody believes in a #scularbullmarketUSA.
Another very, very good sign ;-)
All right, this is it. Have a great week.
All the best and best regards.
Andreas
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