They couldn't take everything red but they took the majority. It was another day where the bullish forces couldn't keep the train steam rolling and the cracks appear to be getting a bit larger as a result. If you haven't made plans for how you ride out the pullback, it's not too late just yet but clearly, after another test of recent highs fades to red, you have to wonder how much longer we play around up here in this rarified air.
In terms of a pull back, you have to ask yourself just how far could it go. Would SPX 1245 be too much? That was the breakout area after all and that's a decent clip down still. What about the 1230-1235 area. Even a pull back that far wouldn't undermine the intermediate term up trend. It would feel terrible and would cause most bulls to stop and scratch their heads a bit were it too happen, but it's clearly no inconceivable given the gains we have seen in this short month of November.
In trading, you have to have a plan. A plan for where you enter, a plan for where you exit, and a plan in between. If you lay out scenarios and then use developing evidence to support the thesis or to invalidate it, you can work the in between times intelligently. Right now, the thesis is for the year end rally to take place. We have seen a large part of that unfold in front of us already. A very short term thesis is for a pull back and then a retest. We are waiting for the pull back to unfold. It should happen this week in earnest if it's coming. Let the data tell you whether your thinking is correct or not. Use the data that the market provides to allow you to profit.
In terms of a pull back, you have to ask yourself just how far could it go. Would SPX 1245 be too much? That was the breakout area after all and that's a decent clip down still. What about the 1230-1235 area. Even a pull back that far wouldn't undermine the intermediate term up trend. It would feel terrible and would cause most bulls to stop and scratch their heads a bit were it too happen, but it's clearly no inconceivable given the gains we have seen in this short month of November.
In trading, you have to have a plan. A plan for where you enter, a plan for where you exit, and a plan in between. If you lay out scenarios and then use developing evidence to support the thesis or to invalidate it, you can work the in between times intelligently. Right now, the thesis is for the year end rally to take place. We have seen a large part of that unfold in front of us already. A very short term thesis is for a pull back and then a retest. We are waiting for the pull back to unfold. It should happen this week in earnest if it's coming. Let the data tell you whether your thinking is correct or not. Use the data that the market provides to allow you to profit.
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