"...A decisive rally Friday tells us all is well and we are on our way back up to 2,800. But a fourth weak close means a near-term test of 2,600 is ahead. And of course the most frustrating outcome, another indecisive day like Thursday that doesn’t tell us anything.
I continue to give the market the benefit of doubt because Monday’s reversal was so decisive. But my faith isn’t infinite and unless the market starts doing something constructive, we will likely stumble back to 2,600 support. From there, the situation gets more precarious because few things shatter confidence like screens filled with red. But if we withstand that second test without collapsing, the market is generously giving us another dip-buying opportunity.
The headlines have been overwhelmingly bearish lately between arresting a key Chinese executive to Trump threatening to shut down the government. While none of this is good, the pullback in prices means a good chunk of the negativity has already been priced in and these discounts compensate us for taking the risk. Most of the time reality turns out far less bad than feared, and that is probably what will happen this time too. But 2,600 is our line in the sand. Fail to defend that level and things will get worse before they get better.
https://cracked.mark...-keep-my-faith/