“Virtue is persecuted more by the wicked than it is loved by the good.” – Buddha

As we wait for some kind of a healthy correction in the equities markets, ‘patience is a virtue’ comes to mind. However, seasoned traders will know that despite this being true, it is far more important to get your sizing right than to be patient. You will not be able to give yourself the luxury of patience and waiting if you get too big.

Back to the charts. What are we focused on? Techs and Small Caps; not looking to perky whilst the Dow is still enjoying experimenting with levitation into the ‘Trump 22,000 Level’ or should we say ‘22,000 Top’? Maybe just wishful thinking on our part but you have to admit that it would be pretty poetic…

You really have to be paying attention to not only the way the RUT has been trading but especially to the intraday price action on all of the big tech names… it’s a big tell on the state, strength and conviction of these recent low vol ramps we have been seeing. Ignore this at your own peril. Furthermore, as we have been discussing repeatedly, we also believe it would be a mistake not to keep an eye on recent action in the Dax, Transports, Financials and so on… a lot of cracks in the system.

As a general reminder, we are not looking for a crash. We are not looking for the next secular bear market. We are not looking for the end of the work. We are just humble students of the markets and price action trying to highlight what we are seeing and were the risk are going forwards. Clearly, the ramps can continue but the ‘risk’ in terms of ‘velocity and magnitude of moves’ are clearly to the downside. We’ll try to expand on this in the next weekly outlook video.

As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.