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These Days Contrarian Equity Trading Is For Masochists - Morning Market Squeeze

Key Tactical Takeaways:


> We simply can't get on board with the idea that it's up, up and away from here for equities. Stay long SPX against the bullish ST Noise Buffer at..., but look to trim longs as SPX nears...


> Although QQQ finally acquired a bullish short-term volatility structure above the 281.01 stop on Thursday, tech's...


> After 1 1/2 months of consistent lower highs and lower lows, the energy sector (specifically XLF) signaled on Thursday that, at a minimum, the most prolonged period of rangy-to-higher price action since early-Jul to early-Aug has begun.


Some Quick Thoughts:


In 2017, I decided to make a career move that I knew would be incredibly challenging. Without divulging too much information, I took a position as a desk technician at one of the street's top institutional brokerage firms. The challenge, which was monumental at first, was to take everything I have learned and practiced over the prior 15 years or so and reverse it. Essentially, instead of generating trade ideas that everyone is talking about (i.e. trend trading), come up with ideas that go against the crowd (i.e. contrarian trading). In a normal equity "market" environment, when the promise of a gargantuan monetary backstop isn't always there to comfort investors, I would imagine that such a trading strategy would be rather exciting. Unfortunately, these days such equity trading is more to the enjoyment of masochists. 


The point I am trying to make is, if perhaps the largest pandemic-relief package to-date wasn't growing increasingly likely due to what many seem to think is an inevitable Biden victory, I WOULD BE POUNDING THE TABLE telling you to ...


To be clear, the equity market's long-term structure is still bullish. This is predicated on the fact that the 09/02 through 09/24 correction was an orderly 3-wave decline that fit well within the historical context of corrections that follow breaks to all-time highs following corrections of > 20%. Since you pay for this service's more tactically-aggressive content, however, I am recommending that you to...


Bottom Line: All the recent upside breadth thrusts and advance/decline breakouts are bullish developments that support the longer-term case. However, tactically speaking, we simply can't get on board with the idea that it's up, up and away from here for equities. Stay long SPX against the bullish ST Noise Buffer at..., but look to...


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