The market dropped hard at opening on Friday and it looked like it would continue to go down to test the Feb lows. After all, the market was shocked by the news that the Trump administration is going to impose high tariffs for steels and aluminum and a trade war is coming. But amazingly when traders were busy chasing low to try to sell as quickly as possible, the market suddenly changed its mind and started to turn up. S&P ended up closing high, a quite bullish sign at least for now, especially just before the weekend.
While it seems very dramatic and unthinkable, I hope there is no surprise to you at all if you are reading my blogs. Here is what I said on Thu: The current selloff has caused enough oversold for now and the chance for a dead cat bounce is very likely tomorrow or if not, then early next week. If we understand how the human sentiment behaviors with a little bit technical analysis capability, we often can foretell what the market is going to do next. Of course not 100% but quite often. I have mapped out the most likely path for the market in the next few weeks, something at least I believe in. So I went long Friday for extreme short term speculation, aiming to get out when S&P makes another suicide kiss in the next few days. Unless the market whispers to me otherwise to urge me changing my mind, I stick to my gun for a likely low testing in the next few weeks. But for now I'm long for the immediate term but with shorts for a longer term to hedge. Let's see how the market will go in the next few days.
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