Well, it was more like a nightmare. But I need to set the stage first.
I was watching George Noory’s Beyond Belief program on the Gaia channel Friday night. It was Season 17, Episode 7, on “Dispatching Your Spirit Guides.” Mr. Noory’s guest talked about Spirit Guides, Guardian Angels, etc., and how they help us.
Don’t get me wrong. Some of the subject matter is a little out there. Nevertheless, if I have a spirit guide or guardian angel, I don’t mind a little help once in a while. Who doesn’t?
So, as I went to bed that night, I whispered to the netherworld that I would be receptive to receiving a lifeline every once in a while. Sure enough, I went on to have a very vivid dream that the stock market crashed. Was it an omen?
But the dream eventually turned into a nightmare. There are always those tricky dreams where you are about to fall, or something bad will happen. You wake up relieved, realizing that you were only dreaming. Not this time.
In my dream, I knew the market crashed, and it wasn’t good. But in the dream, I was not allowed to know whether we were in the market or out in cash. That was the nightmare. I had to sit in a chair outside a room and wait to go into a meeting to find out.
But when I woke up, I finally remembered we were in cash. I was relieved. But then I realized it was a dream, the fact I was in cash was the real world, and the market was ready to go up again. FOMO (Fear of Missing Out) immediately set in. So I will continue to wonder whether the dream was an omen.
For now, bad news is good news for the markets. Both the sad situation in Afghanistan and the Delta variant have quelled fears of the Fed taking the punch bowl away in their (now virtual) Jackson Hole meeting this week. So the market marches on, but with extremely weak internals and plenty of other warning signs. The party won’t last forever.
For now, I am content to day trade. The Navigator Algo issued another high trigger buy signal mid-day today. But I am choosing to ignore it for now. It is tough to swing trade this market, especially with options.
Also, the U.S. Dollar has been breaking out of its downtrend lately, possibly forming a new uptrend from a “W” reversal and bottom. That is not usually good for the stock market in the short term. It might reflect a flight to safety.
There still is not much clarity on interest rates. They could go either way. On the weekly chart, I see a large pattern for rates to reverse higher. They broke above the mean and a very short-term downtrend on the daily chart, also pointing higher. But the intermediate trend in rates remains down unless the 10-year rate can move above 1.37%. As a side note, higher rates will help the dollar – so the two should move in tandem.
So cash is fine for now. The Russell 2000 and Energy both led the performance corner today. A few weeks back, we were stopped out of our first foray into the XLF (Financials) but hit pay dirt on the next try. So I will keep an open mind on the XLE (Energy) if a second look makes sense. I am more open to sectors that have been corrected or based for a while. But I am happy in cash for now from a swing trading perspective.
Anyway, I need to get back to Beyond Belief, Season 17, Episode 1, “Chakras and Money Flow.” When it comes to our money, I leave no stone unturned.
Stay tuned,
A.F. Thornton