Dave, How Are You Timing Your Forecasts?

Afternoon Dave,

I am loving this volatility and can easily see how this market could get ugly to the downside…and fast.

Based on your your recent posts, I know you see similar challenges for the market. So, are you trying to make forecasts into the remainder of 2018 and position accordingly or are you taking baby steps and seeing how things play out?

Appreciate all you do,

Nick R. – Jackson Hole Wyoming


It is a great question for sure. I think it makes a lot of sense to keep things in perspective for the time being. Here is what we know:

  • This is the first extended ‘shock’ to the market in many many years
  • The recovery off the February lows is tepid…at best and subject to further declines
  • The economy remains solid, although some disappointing reports are being seen
  • The record inflow of ‘retail’ money in February AFTER the break lower might have weak hands unless prices start recovering

I can easily argue for lower levels by year-end, heck even by the Summer. But I am making my forecasts looking ahead several days to at most a couple of months using technical analysis. Looking out a couple of months is more applicable to the duration I choose on the Call and Put Spreads I might use right now.

Don’t Forget The Fed

My go-to target for the cause of much of the market mis-alignments remains The Fed. While prices are likely to move towards my near-term forecasts in the S&P 500 at 2525-2450 I am all too aware of the risks of hanging out at the trough.

Let’s not forget that for the past 30-years, every-time someone or some entity got a financial skinned knee, the Fed rode to the rescue. Forget that at your peril….for now at least.

That is my big concern about being short into sharp declines – overstaying my welcome.

So, play the game tight and try not to get ahead of ourselves in here. If we do get another Fed induced rally due to some extreme near-term weakness…then I would start thinking bigger picture since at that point they will have limited options and if that rally fails…..YIKES.

Hope that helps,


Mark Your Calendars for May 2nd – Trading Workshop – London








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