Friday Nov 26 2021
8 43 AM CST
I was dead wrong on FRO and energy buys but my point about the rout in junk bonds just yesterday was spot on.
I had not bought any energy deciding to wait till everyone returned on Monday, I should have said so.
I thought and said that junk bonds would re test their break down of the 200 day MA, well that did not take long.
By the end of the day which is a short trading day we may well see a spike in volume to a new high.
The INDU is dropping out of a head and shoulders pattern.
One of Bob Farrell's rules was that markets return to the mean over time.
https://school.stockcharts.com/doku.php?id=overview:bob_farrell_10_rules
It has been 12 years since the INDU tested the 200 bar monthly MA. It is now at 17,219. Biden's approval rating is the lowest ever in the first year of modern President. If the market tanks, he is toast.
While the media is claiming this is due to covid, nothing could be more wrong. Read Bob's rules and they are kicking in.
We have noted for months the declining breadth, a new peak in lows on the NASD while the NASD makes a new high, the retreat in junk bonds, mania over meme stocks that make no money, enthusiasm for electric car makers, and valuations of FANG stocks.
That is all coming to a head so to speak. More later today.
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