As you state your goal was simply to get me “to acknowledge that fact that (I’ve) completely underestimated this rally”, well I just can’t say that is accurate. On the contrary, I clearly stated & never waffled from the fact that I had a bounce target range for the bounce since at least Dec 31st that ran from SPY 262 up to where SPY topped today, essentially to the penny.

Where I was wrong, after being clearly bullish & long off the lows, was around the first 2/3rds or so of the rally with my expectation of a little deeper correction than we had off the Jan 18th reaction high, with several attempts at position short to try to game what I thought, and stated, would likely be a corrective wave (in which I was open & leaning towards reversing & going long again) followed by another thrust up to as far as where the market went at the highs today. That was a failed tactical trade within a longer-term strategy call on the market.

To clarify, I did not underestimate, even by a penny, just how far the rally off the Dec lows might go up to this point. Should the market rally much beyond this level, then looking back since December up until this point, I would have underestimated the rally. My outlook may change going forward, depending on how the charts develop & if so, you will be right that I underestimated how far the market might rise following the Q4 drop.

My mistake for mistaking your posts supporting the bullish case as analogous to stating your preference for going or staying long at this point in time.

The COT report is one of MANY tools that I’ve used over my last 20 years of trading to identify a potential change in market trend and/or behavior. And if you could please.. not misinterpret or misrepresent what I’ve written (I hate it when people do that, it’s annoying as fudge), because I’m not at all suggesting that anyone should be buying 40 days into a cycle that’s already running long in the tooth – that would be silly beans. I’ll be buying back my shares when we get a recognizable DCL and not a minute before.

I’m simply trying to get YOU to acknowledge the fact that you’ve completely underestimated this rally.. that whatever worked on the way down isn’t necessarily going to work on the way back up! That instead of wasting time arguing your point with me, you should instead acknowledge the fact that your analysis isn’t as fluid as you think, and certainly not immune to your own biases, which are currently in the bear camp no matter how you slice it.

Lastly, I understand that your first impulse is to defend and prove the other person wrong – I get it – but you’ll never learn and grow if you can’t acknowledge and recognize that sometimes (not always, but sometimes) your methods aren’t gonna work within certain market environments. Think about it.. how many bears have tried to pick a top only to have their ass handed to them in the past several weeks?!

You seem to be adamantly bullish at this stage in the rally & if so, by all means, start adding or continuing to add long exposure with your convictions so strong. I respect all opinions whether I agree with them or not. You put a lot of stock on the ‘smart money’ indicators from Sentiment Traders, such as this one that you posted 4 months ago, just as the market started to correct but well before it fell off a cliff in Nov-Dec: https://rightsideofthechart.com/members/christian/activity/49992/#acomment-50040 , while stating:

“Look at the chart I’ve included with my little blurb: SMART MONEY is buying at these levels and if so, how much more downside can we really expect here folks?? A re-test later in the month is entirely possible/probable but another 10% drop heading into the Holidays?! Not totally buying into it :/
> Bottom line? This Market is about to start the MELT UP phase and won’t likely top until mid to late 2019.”

Again, to each his own & while I’ve been aware of the COT reports from many years, I just don’t find the patterns of buying & selling to be consistent enough to do a very good job of predicting trend continuations or reversals. Here the lately COT chart with arrows highlighting the buying patterns of the “smart money” (commercials/hedgers). The way I see it, although they were reducing positions leading up to the first top in early 2018, they were way too early, starting back in Aug 2017 & continually reducing exposure during one of the strong rallies in decades. Then, after the first big drop in early 2018, they were increasing exposure, just as they are now, right up to the first top which was then followed by another sharp correction. Leading up to the Oct 2018 top, they were flat (no net increase or decrease in exposure). Basically, I just don’t see a very consistent pattern with their buying/selling trends leading up to market turns but again, maybe there is some predictive value there but it sure missed the mark last fall.

“The Commitments of Traders report was released covering positions through February 5. As noted in prior weeks, “smart money” hedgers just keep on buying stock index futures. By Feb 5, they were holding more than $20 billion of S&P, Nasdaq, and Dow futures, on par with market lows in 2011 and 2015-16. It’s hard to reconcile this behavior, since they almost always sell into rising markets, not buy aggressively” — sentimentrader.com

NOT Bear Market behavior.

Tightening stops IF you’re long. I wish I was one of those lucky bulls.

PERMA-BEARS continue to underestimate this rally. IWM, DIA, SMH, ITB, XLK and others that I’ve left out, finished in the green today indicating that the bulls are still very much in control and have yet to give any indication of weakness. Yes, we will get a correction of some kind in the near future, but the only thing investors should be doing this late in the cycle is tightening up their stops.