Too Much Good News

A PFE pump on Nov. 9, a MRNA pump on Nov. 16, and another PFE re-pump on Nov. 18.  With all the positive vaccine news pumps coming out lately, it's become too much of a good thing.  Its made investors complacent, and the market got a little bit ahead of itself.  That PFE vaccine pump on Monday, November 6, looks like it was the short term blowoff top for this move, as the market hasn't gotten close to those highs. 

It doesn't mean there is a trend change, but there needs to be a consolidation of the big gains since October 30, and perhaps trade between SPX 3500-3630 until you get institutions willing to pay up again to get in.  Also, we need to see the market worry a little bit more about the Rona 2nd/3rd wave.  I know the permabears have been talking a lot about those spiking Rona cases lately, but I haven't seen it as much among the more mainstream market pundits.  We probably need to see some of that bad news to get prices to levels where it is worth buying. 

Europe is outperforming, and that market looks like it wants to grind higher.  Overseas markets have been trading less volatile than the US, and grinding higher.  It is a risk on environment, and the election reset did enough to purge the speculative positioning to make it safer to play the long side.  I think this uptrend continues into year end as the institutional money gradually goes from bonds to stocks.  Its late stage bull market behavior, increased volatility, ala 1998-2000, with sharp up moves and scary sharp down moves, in a wavy, uptrend pattern, until the final blow off top.  That final blow off top looks set to happen in 2021, probably when the Rona vaccine gets distributed to the masses.

I still have a partial long position on, and will look to add on dips.    Friday is opex day, so we could get a potential flush out next week on a post opex hangover.  Will be looking to buy then if the market dips down below SPX 3520.  Worst case scenario, it could go to 3420-3440, but more likely the downside will be contained to the 3480-3500 zone.  I don't think we get there, but just in case we do, I want to have the ammo to buy at those levels.