"...retail were frothing bullish on the 'breakout' @4200 SPX and are still long." Well, there you go - that's the thorn in the bear's side. If the fangs rally next week and retail never sold then who got trapped? Not wanting to argue - and not making any prediction - just saying if the fangs don't crash below that declining support, then the industrials and small caps could (potentially) resume their rally after the technical pullback has bottomed.
I actually appreciate you stating your case and with analysis - as an echo chamber is no use and its only through seeing difference i/we can learn.
You make a valid point - retail haven't sold ...so they can still 'pull out the win' IF this is as you say a technical pullback, however, consider
- alot of new retail money came in on the 'breakout' - I commented here extensively at the time, I said before that FED meeting I snese a blow off up move that wd reverse ..and sentiment would go euphoric - it did just that.
THAT mean - a ton of retail longs is infact down nearly 10% from that breakout area (using SPX - wd depend obviously) - but severely under water for most timeframes of trading - except maybe long term hold.
- That I believe longs are only half the equation - its also SHORTS - and I track that closely and as i've said shorting is incredibly low relative to a 10% drop ... that means there isn't the 'fuel' to be lit that usually kicks of big up moves.
- That I believe you need Pension/big money support for bull markets - something else I track very closely, and I am not seeing it ..haven't since early 2022 ...and definitely not since 'the breakout' ....you could argue its waiting for
a completed pullback but in my experience its the opposite, this money tends to EARLY not 'chasing' - as retail tend to be the late ones ..yet here we are saying they as 'smart and early' for your 'pullback' to work out.
There main reason though is I followed my model - and I see nothing since October as I said endlessly to support idea this isn't a just a bear market bounce - a great one, but done now.
I could be wrong - I just follow the model/TA and setups - and it reamins bearish since 4200 - but I do lean there will still be 'one last swing up' probably around 3750-3780 ..that will likely be convincing of successful
retest ...and give retail more 'slope of hope' as this bear market is extremely nasty due to ALGO's using alot of our TA against us, long discussion ...but that is why I don't rely on price patterns alone.
Question everything, especially what you believe you know. The foundation of science is questioning the data, not trusting the data.
I only trust fully falsified, non vested interest 'data', which is extremely rare in our world of paid framing narratives 'psy ops'.
Market Comments https://markdavidson.substack.com/?utm_source=substack&utm_medium=email