Pigs Get Fat – Hogs Get Slaughtered

Good Afternoon:

— The S&P 500, our principal investment vehicle, can easily ride higher on tech earnings this afternoon and the Fed’s decision to hold the Fed Funds rate steady tomorrow.

— Nevertheless, we have chosen to sell the last 25% of our positions acquired a few weeks ago at 4775 for 4951.50 today.

— We already discussed a mixed bag of internal weaknesses and inconsistencies in the last few blogs. The market is approaching the top of its ATR channel at 3 ATR – overbought by most measures. And a loose but bearish rising wedge pattern could cinch a short-term peak and pullback. 

— The risk/reward ratio is simply unfavorable to long positions. But we would not short the market quite yet either.

— We will stay neutral at 100% cash for now.

— The next few days will be interesting, with major tech companies reporting after today’s bell and the Fed decision and press conference tomorrow. As always. the past is prologue and forward guidance is the key.

A.F. Thornton