Long Wicks = Pain For Short Sellers?

JC Parets
January 26, 2022

To some investors, they might look at the market and say, "Hey on Monday the market was up a little, and today is was down a little. NBD".

And they won't be wrong.

In fact, Charlie Dow always preached that closing prices were the most important prices. And that was 130+ years ago.

But for those of us who understand the current circumstances. For those of us who do watch the market internals and intraday action, we wouldn't come to that sort of simple conclusion that easily.

In fact, we'd probably disagree with the, Up a little Monday and Down a little Tuesday idea.

There's much more to it than that.

Let's remember what we've seen over the past year. In 2 weeks we'll have the 1yr anniversary of the top in the stock market, or "market of stocks", if you will.

This is when the New Highs list peaked. This is when the Nasdaq A-D line peaked. IPO Index, Biotech, Chinese Internet, Cathy Wood stocks and even the SPACs. They all topped in February and have been falling very hard ever since:

Stock market bulls want to see these stocks stop falling.

But the bond market and commodities might already be pointing to that.

If things were so bad, then why are rates holding in just fine?

Why is Crude Oil holding in just fine?

Feels like rotation, not distribution, at least as far as the broader markets are concerned.

New 52-week highs today for Halliburton.

In this tape!

Pay attention. There are winners out there.

If they tell you that the world revolves around US growth stocks, you want to run away from those people as soon as possible.

That's not how the world works. It might be how their world works, but that's their problem. Not mine or yours.

Every cycle is different.

Don't let people stuck in prior cycles drag you down.

Move on.

There are big winners out there. There's relative strength. You just have to look.

JC

 

 

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