Hi everyone, happy holidays and happy New Year!
Markets are still slowly grinding upwards, and I don’t expect that to stop anytime soon. From my observation, this kind of price action leads to slow upward moves with small, less than 5% pullbacks. I am looking to buy any substantial pullback (more than 10% drop) aggressively.
We are due for a larger correction (10-20% drop), but if that happens, I see it as a buying opportunity. Because of this bad risk/reward at these elevated levels, I don’t like buying here. Shorting makes more sense, but is usually not a great idea at these levels because of the strength of the upward momentum.
SPY weekly chart below. My best guess of a local top would be rapid buying acceleration, which hasn’t happened yet.
BABA weekly chart below. I’m still looking for a good long entry (eyeing 185-210 range, but will start buying near 210). Stop loss near or just below 170.