Friday Foiled

yet another reversal

Below is a chart which future generations as well as younger traders of the present day will consider science fiction. It illustrates that the S&P 500, in the span of well less than a decade, had two bear markets.

These bear markets were not measured in minutes, hours, days, weeks, or even months. They went on for years, plural. These days, any drop lasting more than a few dozen hours seems foreclosed by Keynesian decree.

As a case in point, we had a nice tumble on Friday and, given the news over the weekend, a rational observer would assume that we'd have a massive gap down on Monday morning. Nope, son. That's against the law.

Thus, as one example, the /RTY opened on Sunday and had nary a downtick in in sight. We are well above Friday's highest levels, and the ENTIRETY of the drop conjured up by the Israeli attack is 100% gone. Let me say that again: we're at the same levels as before ANY attack even TOOK PLACE.

Thus, we are flirting with the transmogrification zone (oval) in which the /RTY changed its relationship to the Fib from support to resistance. As of this writing, we remain below 2150 in the form of resistance.

The aforementioned rational person might also conclude that crude oil would be roaring higher this morning (witness JP Morgan's repeated declarations that geopolitical problems would send it to $120) but here again, nope, crude briefly spiked at Sunday's open and hasn't had an uptick in sight. Indeed, paradoxically, the one fleck of red on anyone's screen right now is crude oil itself.

Here, too, a longer-term perspective helps. On Friday, /CL cut through the right triangle pattern, and yet prices have been rejected from that breakout and have been shoved right back into the pattern.

I'm coming into the day with a 117% commitment level, which is medium-aggressive. As I say, we're still below the Fib, as well as the green line of doom from last week, so maybe there's still hope for the one or two surviving bears out there.

This weekly Fibonacci of the /RTY remains neatly intact. As a reminder, as if anyone could somehow manage to miss all the excitement and festivities, Juneteenth is on Thursday, so this isn't going to be a full trading week.